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A Home Buying Guide by Terry Arshem Sioux Falls Real Estate
Buying a home is usually the biggest purchase and investment in a person's life. Purchasing your own home can be exciting, confusing and frightening, all at the same time. This is where the need to take time to get the basics clear. For most people, there first home can be challenging. They don't know what questions to ask or whom to rely on.
What is your criteria for what you want and also what you need?
a) What size house are planning to buy? b) What style? c) What type of housing structure are you interested in? Do like single family, detached home, condo, town home, manufactured home, or multi-family.
Which area do you want your house to be in, what kind of neighborhood do you prefer, and do you need public transportation. Do you prefer living downtown, in a suburban area, on an acreage, or in a rural area.
After having a idea of what kind of house do you want, its time to check on financing. How much can you afford? The best way to determine this is to contact a lender to get pre-approved for a loan. The lender will tell you what you need in the way of documentation to get qualified. He will go over what you will need for down payment and closing costs. He will tell you what the most you can qualify for depending on your gross income and what you may owe. If you need to reorganize some of your finances, he will tell what needs to be done to get you qualified. Once you are qualified, you will be able to make an offer on a home when you find one that meets your criteria.
Once you are pre-approved, your next step is to contact an experienced Realtor. The Realtor works for the buyer but is paid by the home seller. As a buyer, the Realtors services cost you nothing. He will help you get in to look at the homes, get and explain the disclosures, prepare your offer on the home you choose, negotiate your offer with the seller, and advise you on home inspections. He will stay on top of getting the appraisal, title work and inspections done. He will get the closing set up and go to closing with you.
Terry Arshem
Broker
tershem@siouxfalls-realestate.com
605-728-1315
Discover How Get The Right Home At The Right Price
Is it best to begin with a starter home? It is usually better to begin with a less expensive starter home and buy it sooner than to save for the ultimate dream home. It can take a long time to save for that dream home. Low rates have made home buying more affordable. Buyers, for this reason alone have jumped onto the home buying bandwagon. Also it is unknown what the rates will do in one or two years from now.
House value appreciation has been strong, making very solid gains. Home values and prices are expected to increase 3 to 4 percent annually over the next 5 years. By buying a starter home now, you have the potential to begin to accumulate equity that can lead to a purchase of a larger or more desirable trade up home in the future. By building equity you will have more money to use as a down payment and keeping your monthly payments affordable. Also, with the years, income usually rises making a larger payment more affordable.
There are many advantages to owning your own home including pride of ownership, building of equity, and tax advantages. Equity can be used to help put your children through college, buy a second home or make home improvements.
The mortgage interest paid and the property taxes are income tax deductible. If you have fixed rate mortgage your mortgage payment will not go like rent payments will and rent is not tax deductible.
The biggest question asked is “How much house can I afford”? A good rule of thumb is that you can afford a house with a value of two and a half times your gross annual income. A Realtor® or lender can help you determine how much you can afford and estimate what your payment would be based on loan amount, interest rate, taxes, and insurance.
A good Realtor® is your best option when you are buying (or selling) a home because he knows the market, financing and the rules regarding real estate transfer. A Realtor® will give competence, efficiency, and ethics. Good agents take the time to qualify buyers and show properties in their price range. They plan showing routes carefully and have pre-inspected most properties. They have a thorough knowledge of financing options, are up on the latest housing trends, and share with prospective buyers data on the local housing market and home sales.
Good agents also adhere to a strict code of ethics. They avoid high-pressure sales tactics, refrain from showing properties that do not fit your needs or goals, and alert you to problems about the condition of the property. And they show respect for other agents and real estate firms.
A comparative market analysis and an appraisal are the two most common and reliable ways to determine a home's value. Your Realtor® can provide a comparative market analysis. This is an informal estimate of value based on the recent selling price of like neighborhood properties. Reviewing comparable homes that have sold within the past 6 months using the sold prices and the asking prices on current homes. From this is determined the approximate value of the home. There is usually no cost for this.
A certified appraiser can provide an appraisal of a home. After visiting the home to check such things as the number of rooms, improvements, size and square footage, construction quality, and the condition of the neighborhood, the appraiser then reviews recent comparable sales to determine the estimated value of the home. Lenders normally require an appraisal - which runs $200 to $450 - before they will approve a mortgage loan. This protects the lender by ensuring the home is worth the money you want to borrow.
Terry Arshem
Broker
tershem@siouxfalls-realestate.com
605-728-1315 |
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