Buying a Home

Discover Your Perfect Home

Advice on Buying a House

Buying a home is a significant and exciting decision. This section provides professional real estate advice and helpful home buying tips.

A CENTURY 21^® Agent is ready to make a full-time commitment to help you capitalize on current market opportunities and assist you in making an informed decision.

To ensure you make the right choice for the long term, a CENTURY 21 Agent offers extensive knowledge in:

Neighborhoods, schools and market conditions
Mortgage specialists who can assist you with your financing
Technology that gives them an edge, along with multiple resources available just for you on century21.com

Would you like to receive more information on the home-buying process?

Finding the right real estate agent can make you a savvy consumer and improve your overall experience.

Contact Martha Orozco today!

Buying Advice: Buying Your Home

What's Right for You?

Looking for a house to buy? This section will help you create a prioritized list of features to narrow your search.

What's the Right Home for You?

Before deciding which house to buy, consider your lifestyle, current and anticipated housing needs and budget. It’s a good idea to create a prioritized list of features you want in your new home; you'll quickly discover finding the right house involves striking a balance between your "must-haves" and your "nice-to-haves."

If you love to cook, you'll appreciate a well-equipped kitchen. If you're into gardening, you'll want a yard. If a home office is a must, you’ll need a room that will provide you adequate work space. If you have several cars, you may require a larger garage. Use this list as your search guide.

Next, think about what you might need in the future, and how long you are likely to live in this particular home. If you're newly married, you might not be concerned with a school district right now, but you could be in a few years. If you have aging parents, you may want to look at homes that offer living arrangements that could accommodate them as well.

It’s important to think about your new home’s location just as carefully as its features. In addition to considering the distance to work, evaluate what matters to you in terms of services, convenience and accessibility, such as shopping, police and fire protection, medical facilities, school and daycare, traffic and parking, trash and garbage collection, even recreational facilities.

Be sure to talk to your real estate professional about where you want to live and what’s most important to you. While buyers frequently use the Internet to gain access to listings or available properties for sale, an agent brings value to the entire home buying process. He or she is available to analyze data, answer questions, share their professional expertise, and handle all the paperwork and legwork that is involved in any real estate transaction. CENTURY 21^® professionals can help their clients narrow their choices by sharing market trends and local information.

TIP: It’s also important to consider the type of home that suits you best. Is it a condominium or a co-op? A townhouse or detached single-family home? Do you want brick, stone, stucco, wood, vinyl siding, or something else? Do you prefer a new home or an older one?

What Can You Afford?

How much home can you afford? Review your income, savings, and debt to figure out how much home you can afford.

How Much Can You Afford?

Now that you know what you're looking for, the next step is figuring out what type of home you can afford. A review of your income, savings, monthly expenses and debt will be necessary.

Early in the process, you'll want to get pre-qualified for a mortgage loan. It enables you to move swiftly when you find the right home, especially when there are other interested buyers. It also indicates to the seller that you are serious and can afford to buy the property. A pre-approval is a simple calculation done by a mortgage lender that tells you the amount you'll be able to finance through a loan and what your monthly payment will be.

The price you can afford to pay for a home will depend on several factors, such as:

Gross income
The funds you have available for the down payment, closing costs and cash reserves required by the lender
Your debt
Your credit history
The type of mortgage you select
Current interest rates

Another figure that lenders use to evaluate how much you can afford is the housing expense-to-income ratio. It is determined by calculating your projected monthly housing expense, which consists of the principal and interest payment, property tax payments and insurance premiums on your new home loan (also known as PITI).

Each buyer is unique, and a mortgage professional can help you find out just what you can afford. Your income and debts will typically play the biggest roles in determining your price range. It's simple to make an estimate – just run the numbers for yourself using our Affordability Calculator.

Know Your Neighborhood?

Evaluating a neighborhood and surrounding areas thoroughly is essential.

When you buy a home, you're investing in a community. You'll spend a significant amount of time and money supporting the schools, community organizations and commercial centers in the area. Before you make the final decision, take a good look at the location and make sure it fits your lifestyle. For example:

Evaluate the property’s proximity to other important locations in your life. How long will your commute time be? Is there a hospital or doctor's office nearby? What about schools, childcare, shopping, family and friends?
Consider all of your transportation options. A new home could lend itself to public transportation options or carpooling. Depending on the type of community, you may be able to find alternative methods of transportation. Take the time to drive from the new home to your commuting destinations, to get a sense of what your daily life will be like.
Make sure you feel comfortable in the area. Drive around the neighborhood at different times of the day and night on multiple days of the week to observe activity and noise levels. An educated buyer is a happy one!

CENTURY 21^® real estate professionals are a tremendous resource. Ask your agent for a list of schools, shopping centers, parks or other amenities that are important to you. Buying a new home is about more than the structure and property. It's about your new lifestyle as well.

TIP: Visit and understand the school district. Even if you don't have children in the school system now, you may some day. The district reputation could positively or negatively impact the selling price of your future home as well.

Already Have a Home?

Buying a home while selling an existing home has its own set of considerations; this section provides expert buying advice and can help you navigate these challenges successfully.

What If You Already Have a Home?

Buying a new home and selling an existing home at the same time has its own set of challenges. With knowledgeable planning, you can ensure everything goes smoothly.

Before putting your house on the market or committing to buying a new one, take a look at the prices of houses in the areas where you'll be selling and buying. You'll need a realistic idea of sales prices for similar houses, so you can assess both your buying and selling position.

What if you're unable to time the sale of one house with the purchase of another? You may own no houses for a time, in which case you'll need money in the bank and a temporary place to live. Or, you may own two houses at once. That's why it's important to have a backup plan. Here are some options to consider:

Research short-term rental and storage options (family, friends, storage facilities, containers).
Bridge financing (a short-term loan) for the down payment on a new home backed by the equity in your old house.

Buying a Second Home

Buying a second home isn't all that different from buying a first home. Affording it usually depends on your ability to qualify for a mortgage on the second home. Benefits include a getaway for the family on vacations or holidays, a future retirement home, or renters making your mortgage payments for you.

Keep in mind that if you declare it as a rental, your mortgage might be slightly higher and your down payment requirements higher than a standard mortgage. Work with your lender to create a customized loan program with the best combination of rate, points, and closing costs to meet your needs.

TIP: A second home can be a good investment. To make the most of the opportunity, be sure you factor in sources for your down payment and monthly expenses (including the costs of maintaining the property).

Shopping for a Home

A CENTURY 21^® Agent can help you shop for a home, compare homes, and compile your unique wishlist to find the perfect home for you.

Shopping For a Home

Buying a home is one of the most important decisions you will make. That's why it's in your best interest to choose an experienced real estate agent who listens to and understands your needs, and has detailed knowledge of the area in which you want to want to live.

When you choose a CENTURY 21^® agent, you're dealing with a professional who understands your concerns and will provide you with the personalized service that makes all the difference.

What should you expect in your first meeting with a real estate agent? A CENTURY 21 Agent will typically talk to you about the neighborhood where you want to live, home prices, schools, transportation, and the surrounding commercial and residential areas. They can also address the pros and cons of using a buyer's agent versus a sales or dual agent.

When you're ready to visit houses, ask your CENTURY 21^® Agent to help you with:

Arranging showings
Tracking the properties you've seen
Identifying homes that meet your criteria and keep track of your "what's right for you" list

TIP: After touring each home, write down what you liked and didn't like. Your CENTURY 21^® Agent can help you develop a rating system to narrow the field. For example, pick the house you like best on day one and compare all other houses to it. When you find a better one, use the new favorite as your standard.

Buying Advice: A Home of Your Own

Making an Offer

Making an offer to purchase a home has its own set of factors. Rely on a CENTURY 21® Agent’s experience and knowledge to make a successful home buying offer.

Making a Home Buyer Offer

Once you’ve found your ideal house, it’s time to get started with the financial and contractual side of the purchase. Let your CENTURY 21^® professional guide you through this process. Purchase contracts vary in length and terms from state to state, and sometimes within a state.

Multiple offers on the same home are not uncommon, so you may only get one chance to make an offer that the seller will consider. That's why it's important to think carefully about your strategy. In most cases it is better to have your real estate professional present the offer. If you have any personal interaction with the homeowner, avoid sharing any information about your move, your current housing status, financial status or your feelings about their property - positive or negative. This could work against you in future negotiations.

TIP: You and the seller have different goals, so it’s important to consult with your CENTURY 21^® Agent. He or she can bring order to the process, and will know what questions to ask to help you reach a desirable outcome.

How Much do You Offer?

How Much?

Your CENTURY 21^® real estate professional can help you find out what other homes have sold for in the area, and how much money you might have to put into repairs or renovations. These considerations should be a factor along with the amount you're comfortable spending.

In addition to sale prices of other comparable homes, there are several ways you can come up with a winning bid. For example:

The condition of the house. Is the home in move-in condition, in need of paint and other cosmetic improvements, or a fixer-upper that needs real work?
The market. If you are in a buyer's market — where there are more homes for sale than there are people to buy them — prices are probably stable or falling. If you are in a seller's market — where there are more buyers looking for homes than there are homes for sale — prices are probably moving upward.
Your ceiling. If you have a credit pre-approval, you know how much you can borrow for your home purchase. Of course, you may not be comfortable paying as much as you've been approved to borrow, so think carefully about your financial situation before making an offer.

Next, decide how much you are willing to pay for a home. Remember, the advertised price of a house is just a starting point – it may take quite a bit of negotiating to arrive at a final cost.

TIP: The value or disadvantage of certain features can help or hurt resale. In some areas, a swimming pool actually detracts from a home's value, and makes it harder to sell. In neighborhoods with two-car, attached garages, a single-car or detached garage may affect the home sale and future value.

Applying for a Mortgage

Once you’ve made the decision to become a homeowner and picked the house, you may need to apply for a loan. This process might seem daunting, but your lender will guide you through it. The process will be even easier if you know what to expect and prepare for it.

Here are the high-level loan application steps:

Prepare required documents:
- Two years of employment history, current employment status and salary are needed. Employment letters can be used to explain gaps in employment.
- Two years of W-2s (this does not apply if self-employed) and tax returns allow the lender to be sure that your salary is high enough to make the mortgage payments every month.
- Most recent pay stubs for the last 30 days tell the lender that you’re still earning money similar to the amount on your tax returns. (This does not apply if self-employed, but the lender will likely require a profit and loss statement.)
- List of assets, including bank statements, let the lender know that you have the money to cover the down payment, closing costs and a reasonable emergency.
Submit the application. Once you’ve prepared the required documents, the first step with the lender is to apply for the home loan. Of course, you will need to provide personal information, as well as information about the property you’ll be purchasing, such as the address and estimated purchase price.
Provide your documents. Submit your documents, such as pay stubs, W-2s, bank statements and employment history.
Get pre-approved in as little as 24 hours. Once your loan application is submitted, you should receive your pre-qualification in as little as 24 hours.

Lease Options

Looking to buy home through a lease option? Learn about lease options here, or contact a CENTURY 21^®Agent for complete support.

A lease option is an arrangement between the buyer and the seller to purchase a house after renting it for a specific period of time. A portion of the rent would be applied toward the purchase if the option is exercised. This is referred to as rent credit. Most institutional lenders will accept rent credit as part of the down payment, if rental payments exceed the market rent and if a valid lease-purchase agreement is in effect. A copy of the valid lease-purchase agreement must be attached to the loan application. Read any lease option arrangement carefully for details about transferring the option and other important concerns.

TIP: For information on lease options, contact your CENTURY 21^®Agent.

All Cash

If you are planning to buy a home with cash, this section provides some useful information to make your transaction a success.

Buying a Home With Cash

Though most buyers don't buy a home with all cash, anyone considering such a move may be wondering how it’s done. Because all cash buyers sidestep the time-consuming loan qualification process, the deal can close very quickly. The primary advantage of buying a home with cash is completely avoiding mortgage interest. Buyers also save money that would be spent on loan origination fees, required appraisal, some closing costs and various other charges imposed by the lender.

TIP: Take a look at other investments that are doing well, and determine if spending cash on a home is your best investment option.

Buying Advice: Beyond Closing

Inspection

Home inspection is an important step in the buying process. This section offers helpful information that can help to avoid potential problems after the purchase is complete.

Home Inspections

Congratulations! You've made an offer, and reviewed all the documents the seller has provided regarding the condition of the home. But, one important step before you finalize your real estate offer could help you avoid costly home buying mistakes. Hire a professional home inspector to give the house a standard inspection that includes:

Room-by-room review
Exterior home components
Electrical systems
Foundation and structural components – both interior and exterior
Heating/air conditioning systems
Plumbing systems
Attic/basement/crawl spaces

Once you have arranged for a home inspection, plan to accompany the inspector for the entire procedure. You have the right to be there, and leading home inspection companies will encourage your presence. It helps you to better understand the findings in the report and will reduce post-closing surprises. Don't forget your list of questions and items of concern.

A thorough home inspection covers more than 1,000 items, everything from foundation to roof, and takes two to three hours depending on the size and age of the property. The report should reflect the condition of about 400 items. A typical inspection can range from $300-$600

Some common items a home inspection could uncover are:

Maintenance problems such as rotting decks, paint chips, water damaged ceilings, etc.
Electrical problems (even faulty fuses can lead to bigger difficulties in the future)
Drainage problems, which could include water intrusions below the home
Roof leaks and defects from aging
Poor ventilation, especially in an attic; this is the time to assure that all vents are clean and working properly
Excess air leakage due to poor weather stripping and subpar caulking around fixtures
Failed window seals, which are routinely found with dual pane windows
Environmental contamination caused by asbestos, mold, formaldehyde, lead paint, radon, soil contamination and/or water contamination
Faulty lines in water heaters, overflow piping and/or hazardous flue conditions

TIP: Structural damage caused by water seepage into the foundation, floor joists, and door headers should be discovered at the source, and can be easily identified with a home inspection.

Insurance

This section explains how homeowners’ insurance protects your interests in the event of natural disasters and catastrophic events.

Homeowners’ Insurance

Protecting your new home with insurance is a must. How well you do that depends on the details of your policy. And while you are not required by law to have homeowners' insurance, mortgage lenders require that you do.

A standard policy will suffice in most instances. It protects against several natural disasters and catastrophic events. However, it will not guard against earthquakes, floods, war and nuclear accidents. The policy can be expanded to include these disasters as well as coverage for such things as workers' compensation. In fact, the lender may require that you purchase flood or earthquake insurance if the house is in a flood zone or a region susceptible to earthquakes.

Replacement-Cost Endorsement

You can also cover the depreciated value of personal property, such as televisions and furniture, by purchasing a replacement-cost endorsement. This is an extension of coverage that can enable you to replace the item with one of comparable material and quality.

Timeline and Paperwork

In the home buying process, ownership of the home is officially transferred to you at the closing meeting. Know what to expect when you close on your new home.

Home Buying Process - Timeline and Paperwork

Closing can also be referred to as settlement or escrow. Your CENTURY 21® Agent & their Transaction Team will guide you through the closing process, since local/state laws vary.

In general, ownership of the home is officially transferred from the seller at the closing meeting. Most of the people involved with the purchase of your home will attend your loan closing.

In advance, a title company is usually hired to conduct a search for any recorded documents that affect the deed to the property. Examples include easements, liens, tax assessments, covenants, conditions and restrictions, and homeowner association bylaws. The buyer and lender must approve the preliminary title report prior to closing.

Once the conditions of sale have been met and the preliminary title report has been approved, all parties will agree to sign closing documents. The preliminary title report then becomes the final title report, on which any applicable title insurance is based.

If everyone agrees that the papers are in order, the buyer submits payment to cover the closing. If the lender will be paying your annual property taxes and homeowners' insurance for you, a new escrow account (or reserve) is established at this point.

Finally (and here’s the best part) you receive the keys to your new home!

TIP: After the documents have been signed, notarized copies will be forwarded to the lender, funds will be released, and the sale will be recorded at the local recorder's office. This legal transfer of the property may take a few days. It is at the point of deed recordation that you become the official owner of the home.

Moving In

Our home moving checklist can help you make your move much easier.

Home Moving Checklist

6 to 8 weeks prior:

Purchase or rent moving supplies: tape, markers, scissors, pocketknife, newspaper, blankets, moving pads, plastic storage bins, rope and a hand truck. Free boxes can usually be obtained at a local supermarket, but consider purchasing wardrobe boxes for clothes.
Have a garage sale to clear out unwanted items and plan accordingly. Consider donating unwanted items.
Keep a detailed record of all moving expenses. Your costs (and donations) may be tax deductible depending on the reasons for your move.

2 weeks prior:

Hire a reputable mover or rent a moving truck. Be sure to get referrals or references, check with the Better Business Bureau, get estimates and purchase moving insurance.
Two weeks before moving day, contact your telephone, electric, gas, cable/satellite, refuse and water companies to set a specific date when service will be discontinued. Contact utilities companies in your new town about service start dates, including Internet and telephone services.
Notify healthcare professionals (doctors, dentists, veterinarians) of your move and ask for referrals and record transfers.
Register children for school and ask for school records to be transferred.
Notify lawn service, cleaning and security companies when service should be terminated.
Advise the post office, publications and correspondents of change of address and date of move.
Check your homeowners’ insurance and make arrangements for new coverage.

Moving day:

Have tools handy for breaking down beds and appliances.
Give every room a final once over. Don't forget to check the basement, yards, attic, garage and closets.
Have the final payment for the movers and money for a tip.
Don't forget to check in with your local CENTURY 21® Agent – he or she may be able to provide useful local advice and/or referrals.

TIP: Move valuables (jewelry, legal documents, family photos and collections) yourself – don't send them with the moving company. Make sure you have a complete home inventory of all your possessions.

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Martha Orozco

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c21realtornumero1@gmail.com

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