Is 2015 the year for you to become a 1st time homebuyer? If you are saying YES or MAYBE then read on to get an idea of what to expect as you embark on the most exciting and scary purchase you will ever make.
Everyone remembers the first home they buy. Some remember for good reasons, others for terrible reasons. Your buying experience should be remembered for good experiences. Will there be hiccups along the way? In all likelihood. Will you know about all of them? Hopefully not until they have been taken care of.
Most 1st time homebuyers start their search for a new home online. It makes sense, there are many homes to view from the privacy of your tablet, smartphone, or laptop. You aren’t committed to making a decision and can get a good idea of the value homes have in particular neighborhoods and the features those homes will have. The next step is to find a real estate agent you can work with.
In New York you have a choice of being represented by a buyer’s agent or being serviced by the seller’s agent. There is an important distinction here that you should pay very close attention to. A buyer’s agent is working FOR YOU! A seller’s agent who services you is working for the seller, but completing paperwork for you. Anything you tell a seller’s agent is like you are talking directly to the homeowner.
When you meet with an agent they will highlight the process and ask you about what you desire in a home and if you have a neighborhood in mind. They will also inquire about your plans to pay for your home. Will it be with cash? If not, have you found a mortgage banker yet? Your agent can recommend a few mortgage bankers for you to speak with to find one you are comfortable with. Your agent will also explain buyer agency and in all likelihood ask you to sign a buyer’s contract which outlines the responsibilities you both have to each other.
Now the fun begins! Time to get out there an look at homes. As a real estate agent, I love the look on the faces of my 1st time homebuyers when they walk into a home and realize it is the home they are looking for! This is when your agent will research other properties that have sold and are on the market currently to help you decide on an offering price for the home. You may hear them use the phrase “let me run some comps”. What they are saying is “let me research what has sold and how much it has sold for in the neighborhood so you don’t pay more than the neighborhood is worth”. You then decide what you feel the home is worth to you and make an offer. Expect about two hours for reading, writing, and signing the contract and attached paperwork.
The offer now sits in the seller’s hands and you wait. This can take a few hours to a day to get a reply. Generally sellers expect to make a counter offer but sometimes your offer will be accepted as is. Once there is an accepted offer by both sides the clock starts ticking.
You will have selected an attorney to review the contract and they will either accept or reject the contract. There will also be a home inspection so you can find out of there are any hidden problems with the home that need attending to before you purchase the home. Remember, every home has flaws and depending on the age and price of the home, there may be more or less of them. The decision is about how big are the flaws and does the price reflect those flaws. During this time you will also meet with your mortgage banker to get the process started, if you are not paying with cash.
After the home inspection issues are resolved the attorneys take over and complete the legal end of the sale, most importantly making sure there is a clear title to the home. Your real estate agent will check in with your periodically during this time and is working behind the scenes to keep everything moving along for your target closing date.
Finally, it’s closing day. Your agent will be there as you sign more documents than you have ever signed before and hand over a check for closing costs and down payment. Then you get the keys to your new home!
In New York this process takes about 8 weeks and most buyers look at homes for 4 – 8 weeks before finding the home for them.
Questions about your search? Leave a comment and I will answer it.