Buyer's Guide

Notice we said to decide on your budget- not determine how much the mortgage company will give you. In many cases, a mortgage company will pre approve you for more than you’re comfortable spending, which is why you need to determine the monthly payment you feel comfortable with before talking to a lender. This likely includes doing a full household budget and taking into consideration what changes other than a mortgage payment will occur once you move into your new home. If you’ve lived in an apartment or with roommates, you may overlook new expenses like garbage, water, or HOA fees that could easily blow your budget. 

A few of the tips we share with our clients preparing to buy a property before speaking with a loan officer:

Open a high yields savings account and have at least three months of living expenses saved.

Try being more organized with important financial documents and keep them together to easily access them.

Pay any credit card balances down below thirty percent of your revolving limit.

Set a realistic budget for what you want to pay monthly for a home and be sure it works for you- consider your fixed and variable monthly expenses. Feel free to get an idea of what your monthly mortgage payment might look like by utilizing the Mortgage Calculator under our Resources tab. 

Something else that we always share is that you can ask for sellers assist. In today's market, it's completely normal to ask for it. For example, you submit an offer for $400,000, and ask for $12,000 in seller credits. This means the seller is taking $12,000 from their proceeds to cover your closing costs. Why this works- If the other terms of your offer are strong (full price/over asking, quick close etc.) today's sellers are negotiable and likely will not want to lose a strong offer over $12,000. If this doesn't work, offering $410,000 purchase price with a $12,000 credit to balance it out, might. What the seller can't help cover is your downpayment, but what you do have the option of doing- is to see if you qualify for a number of down payment assistance programs. These programs typically look at things like household income, credit score, if you're not a first time home buyer or not, and debt to income ratio. It might seem overwhelming but, our lender will go over these options with you! 

Can you shop for, look at, and ultimately make an offer on a home without a real estate agent? Technically yes, but why would you when it costs you nothing for a team like us to take much of the stress off your shoulders? Not only will we help identify properties you might be interested in, arrange showings, and ultimately handle the offer process, but we also have knowledge of the market and homes that you might not possess. Finding the perfect home can be a daunting task, this is where our expertise and knowledge come into play. Let us show you around some homes that meet your dream home criteria so you can find the one that's right for you.

Once you we find the perfect home, we will work to craft an offer based on the value of comparable homes on the market. Depending on what the home is listed at and whether the current environment is a buyer’s or seller’s market, your offer may be below, at, or even above the asking price. We also will be able to help you negotiate if you receive a counteroffer and reach an agreement. 

Now is the time to go back to the mortgage lender who pre approved or pre qualified you and choose your mortgage. You will be presented with various options based on your unique financial situation, including fixed-rate, variable-rate, 15-year, 30-year, or special programs such as VA loans or FHA loans. Work with your mortgage lender to select the option you feel the most comfortable with. *Our physical copy of our Pathway to Purchase guide further explains this. Email us today to receive one.*

No one looks forward to all the paperwork involved in buying a home, but it’s a necessary part of the process. Fortunately, everything will be arranged by your lender and our in house title company, then when you’re finished, you are the legal owner of your new home. 

Something that is not talked about enough is something called closing costs: These include lender fees, title insurance, escrow setup, recording fees, transfer taxes, and more. Your total due at closing is your downpayment (the percentage of the homes purchase price you pay upfront), added to closing costs,  minus your earnest money deposit, which is the good faith money you put down once your offer is accepted. This amount is usually one to three percent of the purchase price- which is held in escrow and applied toward your down payment and closing costs at closing.  This is all what we call cash to close: Down payment + closing costs - earnest money deposit.

Example: 

Down payment: $12,000

Closing costs: $12,000

Earnest money: $5,000

Cash to close: $19,000

*This is typically paid via wire transfer or cashiers check on closing day

Some of the many tips we share with our clients regarding how to prepare for cash to close:

Get a breakdown from your lender for all of your costs- this is what we call a loan estimate.

Confirm your earnest money deposit amount with us.

Keep your funds liquid and accessible in savings, not tied up in investments.

Avoid large purchases or moving money around before closing day.