How to buy a Home

1. CHECK YOUR CREDIT REPORT:

Lenders look at your credit report to see how you manage your finances.  You must know what your credit report says about your financial history before you apply for a mortgage.  What is in your report will play a critical role in determining your interest rate and other loan terms that lenders will offer to you.

There are 3 major credit bureaus that a lender will use.  They are Equifax, Experian, and Transunion.  Each bureau will give you a credit score ranging between 400 to 800.  The higher your score, the better your credit rating is.  It’s important that you look at all three bureaus since a lender will almost always use the Middle Score.  It’s a mistake to think they average the 3 scores.

Example:  If you get your credit reports from the 3 bureaus.  Equifax gives you a 720, Experian gives you a 680, and Transunion gives you a 700.  A lender will wipe out the high and low and use the middle score of 700 when qualifying you for a loan. 

Check your credit. 

Web address and phone numbers to Credit Bureaus:

Order your credit report & free HomeTerra Credit counseling session

2. GET PRE-APPROVED FOR A MORTGAGE

A Pre-Approved Mortgage will save you a whole lot of time and mental aggravation when looking for a home.  It’s easy to get “sticker shock” here in South Florida; not only in terms of purchase price but also on real estate taxes and homeowner's insurance.  It can waste time to be looking at homes beyond your target price.  Why fall in love with a residence you will not eventually own?

What you can afford depends on:

• your monthly income
• your monthly expenses
• your credit rating
• your down payment
• your qualified Interest Rate

The best way to be certain about what you can afford is to visit a lender. HomeTerra is a full service brokerage firm that can assist with the numerous financial scenarios of your transaction. HomeTerra Loan Consultants will provide you with a free credit report and Pre-Approval, so you will have a clear understanding of the many financing options; along with the typical Closing Costs associated with buying and financing a home.

Get Preapproved

3. SELL BEFORE YOU BUY: 

If you have a home to sell; sell it before selecting a home to buy. It is rather risky to put an offer on a home before your current home sells first. Contingency contracts rarely work in this South Florida market.  At the minimum obtain a contract on your current home, so you can make the contingency on the closing of your current home, not the sale.

If you decide to make a contingency offer, you will likely end up paying more for the home than without that contingency. You may feel pressured to accept a lower price for your current home. What happens if you cannot sell your current home in time or you do not get the sales price you expected?  You might even put yourself in a situation of making payments on both homes until the current home sells.  This can end up costing you tens of thousands of dollars.

In HomeTerra’s point of view this is truly unneeded stress.  Keep this in mind; Seller’s don’t want to wait until your home is sold in order to get their money.

4. SEARCH FOR A REPUTABLE REALTOR:

Find a qualified and reputable S. Florida Real Estate Agent; Why? Because their service is free to you. A Real Estate Broker gets paid by the Seller and only when they find you a home.  Traditionally, the Seller pays the commission in Real Estate.  If you find a Buyer’s Agent and their company charges a “transaction fee” just to do business with you, find one that does not! At HomeTerra Real Estate there is no need to charge any extra “junk fees” to the buyer when they are making such a large purchase.

A real estate agent will have up to the minute access to the MLS. (Multiple Listing Service) This is a database of all the active property listings for sale in your search area.  You may be tempted to pick up a “Homes for Sale magazine” and read classified ads in your local newspapers.  You’ll probably spend time surfing the internet for homes.  You might even plan afternoon drives to preview neighborhoods and attend Open Houses.  These are all ways to see what’s available, but if you really want to make the process more efficient and maximize your viewing options, you will use an agent that has up to the minute MLS information to their advantage.

5.    SET UP AN AUTOMATIC DAILY SEARCH OF HOMES:

Use technology to your advantage.  HomeTerra Real Estate offers: a complimentary South Florida Home Finder Service to all our clients.  With our service you can choose your exact search criteria such as:

• Targeted areas
• number of bedrooms and baths
• square footage
• age of home
• homes with pools
• and many more options

When your criteria is entered into HomeTerra’s advanced real estate database, it will automatically sift and sort through every home available. Our South Florida Home Finder Service will email a comprehensive list of all properties that fit your search criteria.  It will even update you on any price reductions to previous listings. The beauty of the system is that you will always be in control of the types of homes you are searching for.

Now stop calling ads! Do you realize real estate agents create the real estate newspaper or magazines ads you find solely to make their phone ring! The most popular South Florida real estate magazines’ production time runs almost 1 month behind. Consequently, Many S. Florida homes appearing in these periodicals have already been sold.  A large number of homes are sold without a sign ever going up or an ad ever put in the newspaper or homes magazine. These great finds go to buyers who are committed to working with an agent with MLS access.

Take the step and let HomeTerra’s South Florida Home Finder Service inform you about the great homes coming on the market before the rest of the world gets to them.

HomeTerra Home Finder Service

6. MAKING OFFERS AND THE NEGOTIATION:

This is where the value of a HomeTerra Real Estate Agent comes into play.  We will listen to you and make an offer that will be to your advantage. We will also review all the disclosures so that you completely understand the offer and the negotiation process.

• How much should you offer property?
• What you can make your offer contingent on?
• How much of a deposit you should put down?
• What exactly comes with the house?
• What are the current Taxes?
• What is included and how much are the Home Owner Association fees?

Purchase Price might be the bottom line for you, but a great agent will let you fully comprehend the whole picture before you commit yourself. Believe us, there are numerous items to review and understand than simply “The price.” If your agent provides you with adequate information and you use it in an appropriate manner; your real estate knowledge can give you a great deal of leverage in the buying process. Some of the things that you may have to negotiate on are:

• Price
• Financing  
• Closing costs       
• Repairs
•  Occupancy

7.  SELECT A TITLE INSURANCE COMPANY/CLOSING AGENT OR ATTORNEY: 

HomeTerra has established relationships with Title Insurance companies and or Attorneys that will act as neutral third parties.  Their job is to hold all instruments necessary to the purchase/sale, and carry out predetermined funding and deed instructions. The Title Insurance Company or Attorney will perform comprehensive research to ensure the buyer is able to purchase with a “clear title” to the property. They will also hold your deposit in “escrow” to ensure your contract terms are met before you buy.

8.  HOME APPRAISAL AND INSPECTION:

The Home Appraisal is probably the most important issue once there has been an Offer and Acceptance between both the buyer and seller.  The appraisal is important because a bank is only willing to finance what a home is worth; not the price a buyer and seller agree to.  If the home does not appraise for the Sale Price, it will almost certainly kill the deal unless both the buyer and seller agree to negotiate and revise the price.

At HomeTerra Real Estate Services of South Florida, we strongly recommend a Home Inspection for your own protection. There is no telling what types of problems could be present inside the home in which you are making an offer. Obtaining a home inspection will reveal the status of important items such as:

• the structure
• foundation
• roof
• electrical components
• air conditioning
• plumbing
• and many more items of importance

A home inspection is remarkably reasonable: $100-$400. A home inspection could save you thousands! If there are serious issues with the property you can always walk away from the deal or re-negotiate.

9.    SHOP AROUND FOR HOMEOWNER’S INSURANCE: 

If you don’t have an Insurance agent, HomeTerra will help you find a real estate insurance agent that will guide you through best options for your new property.  Remember, in some South Florida areas you might have to pay for Homeowners, Hurricane, and Flood Insurance.  The monthly payment for insurance can be added when making your estimation for your total monthly payment of PITI. (Principal, Interest, Taxes and Insurace)

10.     AVOIDING AND CORRECTING LAST MINUTE PROBLEMS:

As the closing date nears, HomeTerra agents will continuously be keeping you up to date on the progress of your transaction.  At HomeTerra, it’s our job to keep on top of things so there won’t be any “last minute surprises” in store for you

11.    FINAL WALK-THRU INSPECTION: 

Prior to taking possession of your new South Florida property; you and your HomeTerra agent will visit the property one last time. This final visit ensures that the property’s condition meets your expectations compared to its condition when you made your offer.

12.    CLOSING:

You are finally ready to go to “settlement” or “closing.” But previous to the closing, your Home Terra representative will obtain the “HUD Settlement Statement” on your behalf from the Closing Agent or Title Company. This is the most important document in the whole transaction which explains all the finances. By first looking over this document for accuracy, Your HomeTerra real estate agent will ensure you are “ready” to sign and begin owning your new South Florida Home. If there should be any inaccuracies, your agent will make certain they are addressed before going to closing.  This will prevent any unexpected surprises at the closing table.