Our Guide to Home Buying
Buying a home is one of the biggest investments you will make and it comes with long-term financial ramifications. It calls for many informed decisions and for expert advice from a real estate professional, which is exactly what you’ll get when buying a home with Cornerstone Partners.
How Cornerstone Partners will help find the right home for YOU
- We will help you determine how much home you can actually afford, often suggesting additional ways to accrue the down payment and alternative financing methods. We can introduce you to a mortgage counselor and arrange to have you “pre-approved” which will greatly improve your negotiating position and enable you to achieve your home-buying objectives faster and with less stress.
- We will help you discover the home best suited to your needs – size, style, features, location, accessibility to schools, transportation, shopping, and other personal preferences.
- We have access to all available homes in the multi-list system, are able to evaluate them in terms of your needs and affordability and we WILL NOT waste your time showing you unsuitable homes!
- We will often suggest simple, imaginative changes that can make a home more suitable for you and improve its function, flow and re-sale value.
- We will work for you as a buyer’s agent and help negotiate the best price and terms for you. Or, we can serve as a seller’s sub-agent (or disclosed dual agent), acting as a liaison between you and the seller to present offers and counteroffers until an agreement is reached.
- We will supply information on real estate values, taxes, utility costs, municipal services and facilities, and often may be aware of proposed zoning changes that can positively affect your decision to buy.
- We can provide you with a list of law practitioners to choose from if you would like to use the services of an attorney, although the law does not normally require an attorney to review documents or oversee real estate closings.
- We will help familiarize you with the closing process and we will obtain figures PRIOR TO CLOSING for your review.
- We will provide you with a list of qualified home and pest inspectors and surveyors and help to coordinate all of the scheduled appointments.
10 Successful Home Buying Tips
Tip #1: Research Is the Key to Discovery
Home sellers won’t call you with an offer to buy a maintenance-free home with a wonderful mortgage. You have to find the gems yourself! Only by reading available materials, talking to friends and experts and spending time looking at different homes, schools, and neighborhoods will you end up with your Dream Home!
Tip #2: Make A Plan and Get Pre-Qualified
A thorough home buying plan will save time, money and help you focus on important factors and organize the entire process. (You may even want to use a binder with sections on house hunting, home financing, service providers, etc?) Loan pre-qualifying helps you determine the home price you can afford and presents you as a genuine prospect to the seller. A lender typically uses the 28% formula (your monthly mortgage can’t exceed 28% of your monthly income) in approving your loan. Planning your actions and getting pre-qualified will keep you out of “panic mode” and allow you to take advantage of opportunities.
Tip #3: Value
The classic rule of buying the worst house in the best neighborhood still applies. If you buy with an eye towards improvement, you can customize the home to fit your needs. The saying, “make money buying a home, not selling one,” should keep you focused on the long-term importance of the purchasing price.
Tip #4: Create A Top 10 List of Amenities
When shopping for a home, list the features (fireplace, fenced-in yard, new appliances, etc.) that are most important to you in deciding on which home to buy. Establishing “your criteria” early on will save time shopping for inappropriate homes and may keep you from buying a home on a whim. As detailed in Tip #3, your top reason for buying a home should be the value you are getting. Some of your top 10 amenities should logically be sacrificed if an incredible value is available.
Tip #5: Fixed vs. Adjustable Rate Mortgage (ARM)
ARM – Adjustable rate mortgages have an initial fixed rate, which is followed by a period of adjustment intervals during which the rate adjusts based on the performance of several key indexes. Typically, the initial fixed rate on an ARM is slightly lower than the comparable rate of a fixed rate mortgage.
FIXED – Fixed rate mortgages allow buyers to take out a long-term loan without having to worry about changing interest rates or monthly payments. Most fixed rate loans are offered in terms of either 15 or 30 years. Most buyers will be well served by a fixed rate loan, but each situation is unique and ARM loans can still be a viable option for some buyers – especially those who plan on selling again in the short term. Whichever loan you choose; please scrutinize all of the closing costs! If you are required to have a mortgage escrow account and private mortgage insurance, make sure you understand the terms and cancellation procedures. (We have publications to assist you…) Also, make sure there are no prepayment penalties so that you may utilize an accelerated mortgage plan which can save you tens of thousands in interest costs, and shorten your loan term, with only small extra principal payments. (If by some misfortune you experience negative changes in your job, health, or marital status, you can revert to the standard payments in your mortgage contract.)
Tip #6: Sign A Contract That Protects YOU
Make sure that the contract you sign allows you to arrange financing inspect the home and negotiate any problems that may be discovered. (Ensuring that the contract you sign will minimize potential legal battles allows you to swim in your new pool with your family and neighbors instead of with the sharks!)
Tip #7: Put Yourself in The Seller’s Shoes
If you take time to understand the reasons the seller bought the home, their reasons for selling and the home improvements they have or have not made, you’ll be in a better position to evaluate the home and negotiate a better deal. In the end, the home buying process comes down to the INDIVIDUALS buying and selling the home. A closer look at the seller may help you decide whether to purchase a particular home and for how much.
Tip #8: Develop A Mortgage Shopping Chart
One of the biggest decisions to make before putting a contract on a home is how to finance the purchase. There are more than 10,000 lenders competing for your mortgage business. The days of simply walking into the community bank and negotiating with the loan department manager are over. Today, you can apply for a loan over the Internet or even use a mortgage broker. When choosing a lender, you want to compare fixed rate loans to fixed rate loans, not to ARMs. Create a chart that lists different types of loans, fees, and at least five mortgage providers (including a mortgage broker).
Tip #9: Get A Quality Home Inspection
Although it is hard to believe, more people pay for inspections before buying a used car than when buying a home – the biggest investment of their lives! Paying for a qualified home inspection BEFORE you buy a home isn’t just spending “a little extra” for peace of mind; it’s absolutely essential for anyone who doesn’t want a potential surprise costing thousands of dollars to repair.
Tip#10: Peace of Mind: Home Protection Plans
To protect you as a new buyer it is a good idea to purchase a home protection plan/home warranty. This is a service contract, normally for one year, which protects homeowners against the cost of unexpected repairs or replacement of their major systems and appliances that break down due to normal wear and tear. A negotiable contract between the buyers and sellers which does not overlap or replace a homeowner’s insurance policy, this type of warranty can save the new homeowner lots of headaches, as well as put the seller’s fears to rest. The warranty covers mechanical breakdowns, while insurance typically repairs the related damage. (For example: if a hot water heater bursts and destroys a wall in your home, the warranty would repair the water heater and your insurance would pay to fix the wall.)