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.
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.
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.