Buying a home is a big step, an important step, and an exciting time in one's life … and making the smart move of choosing a REALTOR® is your first step to ensuring that your home buying experience will be a successful and pleasant one. Due East Real Estate licensees are required to be active members of the National Association of REALTORS®. REALTORS® are committed professionals that treat all parties to a transaction honestly and subscribe to a strict code of ethics. We strive to deserve your business and to earn your repeat business!
10 Steps To Buying Your New Home
1) Decide to purchase a home. Begin by writing down your motivating factors, whether it be a new job in a different location, a growing family, or the desire to build equity by owning as opposed to renting. Come up with a rough guideline to give yourself a time frame, and then make your “must have” features list - ideally, you will find them all. Your Due East Real Estate agent will help you analyze your needs and focus your energies into what is possible. Read More >>
2) Determine your price range. Contact your bank or mortgage company and get pre-qualified or pre-approved (a more involved process that will give you the exact amount you will be qualified for). Your Due East Real Estate agent can act as your personal advocate and liaison between you and your lender as you proceed through the approval process and closing by working with your lender on a regular basis.
3) Neighborhood Information. People do not just buy a house, they buy a neighborhood. For example, if you found the perfect house, but did not like the neighborhood, would you make an offer? Your Due East Real Estate agent, armed with your “must have” features list, your pre-approval amount, and your neighborhood wants and desires in hand will be able to conduct a broad search and then narrow it to specific areas dictated by the market in which you will be looking.
4) Home Search. At this point you will have a good idea of what you can afford and what type of neighborhood you will want to live in. Taking that information into consideration you are ready to embark on your actual home search. Your Due East Real Estate agent can save you time and money by searching for and keeping you up-to-date on available properties that possibly meet your criteria - and your agent will screen these properties for you. You can eliminate the haphazard searching through papers and the Internet and let the listings come to you through your agent. Then when you find the one that you like, your agent can arrange to show it to you at your convenience.
5) Making an offer. You have found the property you would like to purchase. Taking into account recent sales of homes in the neighborhood that are of similar size, condition, and amenities - what are you willing to pay for the home? You will be presenting the seller with an offer detailing what must be done by both parties to execute the transaction. Once your offer is accepted by the seller, it may be too late to make any changes, so make sure to review your offer thoroughly before submitting it. Your Due East Real Estate agent will be able to expertly advise you on what to include in the written contract and on how to create an offer that will have the best chance of being accepted. Your agent will also ensure your financial position as the buyer by including any necessary contingencies which would protect you if a particular requirement is not met.
6) Negotiating to Buy. The key to successful negotiating is keeping in mind that the end result must make both you the buyer, and the seller happy. Keep in mind that almost anything is negotiable. This can give you a great deal of leverage if you have adequate information and use it in an appropriate manner. As your Buyer representative, your Due East Real Estate agent will have your best interest in mind and will negotiate on your behalf and should have the knowledge and expertise necessary to make sure that your offer is accepted at the best price and terms possible for you.
7) Appraisal / Inspection - after Offer Acceptance. Working with your lender you may need to have a formal appraisal and/or survey done to make sure that the property is up to the standards set forth in your written agreement. Property inspections may also need to be done. Your Due East Real Estate agent can save you time and money by coordinating and supervising these necessities and serving as your advocate when working with each vendor. His/her experience will be invaluable in making sure that everything is completed on time and in a professional and legal manner.
8) Pre-Closing Preparation. As the closing draws near, you will need to be in touch with your attorney or closing agent, and your lender to make sure that all the necessary documents are being prepared. Your Due East Real Estate agent will oversee this and also confirm that all documents will be delivered to the correct location so they can be reviewed and be ready for a quick and easy closing on the appropriate date. Your agent will arrange for a pre-closing “walk-through” of the property for you, to be sure that everything is as stated in the contract.
9) The Closing. The closing is where ownership of the home or property is legally transferred. Closings are usually held at the lawyer’s office or at the title company’s office. The closing officer coordinates the document signing and the collection and disbursement of funds. Your Due East Real Estate agent can save you time and money by being present at the closing reading the document on your behalf and helping to resolve any last minute issues that may arise.
10) Post-Closing. Congratulations on the purchase of your new home! Your Due East Real Estate agent will help you coordinate the set-up of local services such as: electricity, cable and phone set-up. Also, he/she can provide you with a list of contacts for the above services as well as others.
Benefits of Home Ownership
- Establishes financial credibility.
- Provides you with more privacy than renting.
- Independence. You are free to paint walls; plant flowers; keep pets!
- Being established in a community provides a sense of stability, belonging, and security.
- Home ownership can provide security against inflation. The value of your home increases as prices go up.
- Pride of ownership. A home reflects its owners values and lifestyle. Owning a home provides you with a sense of pride and satisfaction.
- Investment value. Improvements made and mortgage paid down increase the value of your property.
Helpful Real Estate Explanations
There are some key differences between pre-qualification and pre-approval for a loan that you need to be aware of. Loan pre-qualification is a simple process. After taking into account very basic information regarding your financial status, you are given an amount for which you may qualify. The pre-qualified amount is based solely on the information you provide. This information is not thoroughly investigated and so therefore may be unreliable. Where a pre-approved buyer is actually approved for a loan of a certain amount, a pre-qualified buyer is only told that they might be approved for a certain amount.Read More >>
Pre-approval for a loan is a much more involved process than pre-qualification. The lender will take all pertinent information regarding your finances and perform an extensive check on your current financial status. This will ultimately give you the exact amount that you will be eligible for (depending on what type of loan you decide to go with). Being pre-approved puts you in a stronger bargaining position with the seller and also lets him know that you have gone through an extensive financial background check and there should be no unexpected obstacles to buying the home.
The type of mortgage you apply for will depend on many factors, but the majority of that decision will be based on your ability to pay a monthly installment. Financial planners say that you should not pay more than 28% of your gross income for housing (that includes principal, interest, taxes, and insurance).
Once you have determined what you can afford, the next step is to choose a mortgage plan. There are many different mortgages out there, so take some time and explore all of the possible plans for which you qualify. You could save yourself thousands of dollars in the long run! See: FinanceTools
Home Inspections normally include an on-site inspection of the structural and mechanical condition of the property including appliances and fixtures remaining with the property, plumbing, electrical, and heating systems, and more. Inspections are at the buyer’s expense and must be completed in the time frame specified in the contract.
After completion of the inspection an addendum may be prepared to request specified, defective items be repaired prior to settlement. Cosmetic items and normal wear and tear are not the seller’s responsibility. In his/her report, the inspector may advise you on defects and make recommendations for preventive maintenance.
The selection of inspectors is your decision. If you like we will provide you with a list which may help you but it is by no means inclusive of every inspector. Remember the inspectors should be licensed in the state of Maine.
Appraisal (required by the lender)
An appraisal is a third-party estimate of the value of property at a particular point in time. It can affirm your offer price or block your transaction entirely. All appraisals must conform to guidelines set by the Federal Reserve, but every appraisal is ultimately a subjective analysis of a property’s current market value.
True market value can be difficult to ascertain in markets where prices are volatile and properties vary widely. To determine current market value, an appraiser will compare the price of your home with that of at least three comparable homes that are in the area and have sold within the past six months, then adjust for the differences in the properties. An appraiser will physically measure and inspect the home (which does not qualify as a home inspection) to compare, and may also take photographs to include in the report with floor plans and a site map.
Title insurance is different from other types of insurance in that it protects you, the insured, from a loss that may occur from matters or faults from the past. Other types of insurance such as auto, life or health cover you against losses that may occur in the future. Title insurance does not protect against any future faults. Another difference is that you pay a one-time premium. A title insurance policy will protect you from “risks” or undiscovered interests.
There are two principal forms of title insurance: the lender’s policy and the homeowner’s policy. A lender’s policy protects the mortgage holder. If there is a fault in the title that results in a loss, the mortgage holder will be paid back. A homeowner’s policy protects you, the purchaser, against a loss that may occur from a fault in your ownership or interest you have in the property. You should protect the equity in your new home with a title policy, which protects you from financial loss due to demands that may be charged against the title to your home and pays legal costs if the title insurer has to defend your title against a covered claim. Payment of a successful claim against the title to your home is covered by the policy.
What sets us apart from the competition?
Through working with many hundreds of buyers in nearly a thousand closings, we have created and honed a system that makes the buying process as easy as possible. When performing as your agent in a buyer representative capacity, we walk each buyer through every decision from choosing a town or neighborhood, to the closing.
Call us today and find out more about why Due East R. E., LLC is one of the most respected real estate companies in eastern Maine.
Please take the time to familiarize yourself with the Brokers Real Estate Relationships document to fully understand the differences between “client level” (client/agent) and “customer level” (customer/transaction broker) services.