Helpful Information For Buying a Home
Buying a home is a huge decision, and one made with a lot of thought and planning. Before you start searching for homes for sale, make sure you know what to expect from the process. When it comes to home buying, surprises are never good.
The Role of the Real Estate Broker
Your real estate broker is your number one ally when it comes to buying real estate. Whether your call him an agent, realtor, or broker, the job description is basically the same. The broker's job is to walk you through the home buying process, select properties for you to view, and take you to view them. Keep in mind that most brokers are working for sellers, so they may not have your best interests at heart. You can hire a buyer's broker if you do not have a property to sell to eliminate this problem.
The Real Estate Attorney
Another professional you will use in the home buying process is a real estate attorney . The lawyer will review offers in a real estate transaction to ensure that everything is as it should be. The lawyer will also help inspect the title at the closing on the home. Some states require a lawyer at the closing, but using a lawyer when creating or accepting offers is up to you. If you choose to use one, find one with experience in real estate, and specifically one who has handled purchases similar to yours. If you are going to be buying foreclosed properties, a real estate attorney is an absolute must, because there are many complications that can happen with these homes.
Terms of Sale
When you find a property you want to purchase, your lawyer and broker will help you create an offer. The offer will contain everything you want to have in the agreement for the sale. For instance, if you want the current owner to replace the carpet or drop the price so you can, this will be included. You will also include the price you are offering.
The seller will counter with an offer of his own, and eventually you will come to an agreement. Once both the seller and the buyer have signed the offer, it is considered a done deal. The only exception is if there is a contingency on the offer. For instance, if the buyer has a home to sell before he is ready to buy, he can make a contingent offer. If the seller receives a better offer while the buyer is still selling his own home, the offer can be declined in favor of the non-contingent one.
Your Mortgage
Once you have a property in mind, it is time to shop for a loan . You have several choices. The most common type of loan is a fixed-rate loan. In this loan structure, you agree to a loan with a fixed interest rate. You will pay the loan back within a set number of years, typically 15 or 30, and during that time the interest rate will not change. Adjustable rate loans have interest rates that change with the national interest rate. Frequently, this means the interest rate increases. Interest only loans allow the borrower to make no payments towards the principle, but when the loan comes due the entire balance of the principal is due. If you intend to stay in the property for a while, the best option is a fixed rate loan.
Choosing a Settlement Agent
The final step in the process of buying a home is closing on the property. The settlement agent is the person who will handle all of the paperwork for the purchase and loan. Choosing the right one can make the closing go much quicker. In some states the settlement agent must be the real estate lawyer. In others, title or escrow companies play the role of the settlement agent, while some states have a combination of these two closing structures.
Figure out what closing structure your state uses, and then shop around for the right settlement agent. Look at the time it will take to close, the fees involved, and the level of professionalism of the agent you are considering, and then choose the one that will be able to close on the sale quickly, affordably, and professionally.
Settlement Costs
What should you expect to pay in settlement costs ? The answer varies tremendously based on location, so it is best to call several lenders and settlement agents for quotes. They are required to provide you with a Good Faith Estimate of the closing costs on the loan you are considering. Use this to compare the settlement costs from company to company. Be prepared to pay for things like the title search, title insurance, taxes, insurance, and your realtor's commission. Remember that many of these are not fixed rates. Title insurance, for instance, is something you can shop around for, so be sure to ask your settlement agent and attorney what options you have if you need to reduce your settlement costs.
Right to File Complaints
What can you do if you feel your home purchase was not handled correctly? The first step is to go to the source. If, for instance, you feel your settlement agent has not been honest with you, ask about the infraction. If that does not work, check real estate laws to see if any have been violated. The Department of Housing and Urban Development website has many of these laws for you to read. If they have been violated, you can sue privately or file a complaint with the government agency that regulates the provider who wronged you.
Remember, under the current law, your lender is required to respond to any questions you have about your service. If you notice an error or have a question, send a "qualified written request," which is basically a separate letter, outlining your response. Refer to Section 6 of the Real Estate Settlement Procedures Act (RESPA) in the letter, and include your name and account number. Your lender has 60 days to answer the letter and fix any problems that have occurred.
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