Purchasing your first home is an incredible feeling, as years of hard work and planning finally come to fruition. However, if you are not entirely financially prepared for this purchase you could find yourself in over your head quite quickly. A home is by far one of the most important purchases, and the most expensive, you may ever make. This means you should make every effort to ensure you are ready for this step; a bit of extra preparation before purchasing allows you the confidence to enjoy your new purchase for years to come.
What Can You Afford?
You may have mastered the world of renting, but homeownership is a whole different ball game. It’s important to take the proper time to make sure what you are buying is affordable given your current financial position.
Take the time to pay off as much debt as you can. This step not only improves your savings but also increases your credit score to help get a better interest rate on your mortgage. Remember, being a homeowner isn’t just about paying a mortgage. There are other additional costs associated with homeownership to consider. Take the time to calculate real estate taxes, homeowner’s insurance, HOA dues, and any home improvements that may pop up unexpectedly. Once you’ve mulled over these factors, you can honestly evaluate your bank accounts to see if you have the funds to pay for your home, extra costs, and still have enough to feel comfortable.
Do Your Research
You may have found the perfect home at the perfect price but is it a perfect location? There are plenty of considerations to make before rushing into any home purchase. You can make a more confident decision if you do your research before and during the purchasing process.
Drive around the neighborhood and the others close by. Make sure you are comfortable with the location, would you feel safe out for a walk or playing in the yard? Are there parks nearby or park district facilities? How are the school districts, do they have good reviews, are they close to the home? What about shopping, can you walk to the shops or will it be a long drive? Make sure you are purchasing a home that has the amenities and neighborhood that best suits your current and future needs.
Get a Good Team Together
Since this is by far the most important (and expensive) purchase you may have made to date, it is important to have professionals at your side to make sure everything goes as smoothly as possible. Finding a seasoned realtor can help ensure that you are getting the best deal you can find. A realtor can find you exactly what you want, taking into consideration your expectations and what you can afford. A good realtor also helps with mortgage questions, interest rates, and loan types.
Having an experienced real estate attorney at your closing can give you the peace of mind that all documents will be ready and that each step will run smoothly and efficiently.
If you find you are ready to purchase your first home give the professionals at Bell Law a call. There is always someone available to answer any questions you may have about the buying process and can help make this life-changing step as easy as possible.
Buying or selling a property is exciting. But it is also expensive. Most purchasers or sellers are unaware of the costs that are associated with the process. Whether you are buying a new home or selling a home it is important to know exactly what to expect at closing. Unfortunately, many buyers and sellers are unaware of the extra costs associated with purchasing and selling a home. Fees can add up quite fast, and no one likes being surprised with an increased budget. Being prepared can go help make the transaction much smoother for both parties.
When Selling Your Home
One of the most stressful parts of selling a property is pricing the property correctly. A price that is too high will keep buyers away and keep your home on the market for far too long. In contrast, a price that is too low will decrease your profit potential. As you price your home or property, keep in mind the additional costs that could pop up and add those into your original price point.
First, most sellers will hire a real estate agent. An agent helps list and sell your home, which is invaluable. However, that service comes at a price. Typically, an agent receives a commission between 3%-6% of the selling price.
There are additional expenses that go into ensuring a quick sale including lawn maintenance, painting, carpet cleaning, and other repair costs to get your home looking its best. The most expensive of these extra costs can be staging. This service can certainly pay off, making your home look amazing and appealing to buyers, but the cost to you can be more than $1,000.
Once your home is sold, closing costs come into play. Typically, sellers pay far less than the buyer, but costs can be 2%-5% of the selling price. A seller needs to be prepared to pay pro-rated property taxes and HOA fees in addition to closing costs as well. Knowing that all these fees and expenses are necessary can help a seller be better prepared when the day comes.
When Buying Your Home
The buyer can often have more costs to be aware of than the seller. Many of these fees come from the mortgage lender, who can charge loan origination fees and underwriter fees. Lenders will also request home inspections and title searches which can add to the extra fees associated with the home purchase.
In addition to these fees, it is important to remember the costs of real estate agents and lawyer fees. When it is time to close, most lenders will require you to have a certain amount of money in an escrow account along with the down payment and closing costs, which can be 3%-4% of the home price. There are ways to help reduce some of these costs by rolling them into your mortgage, closing at the end of the month or applying for an FHA loan.
With so many factors going into buying and selling a property, it can begin to be quite overwhelming. Having an experienced real estate lawyer by your side is valuable. Your real estate attorney will advocate for your best interests and keep you in the communication loop.
If you are looking to make your buying or selling experience as easy as possible, the professionals at Bell Law are ready to become your partners during this exciting time. Call us today to get started.
No matter if you are purchasing your first home or your seventh, the process can feel daunting. When you invest in a new house or property, it can be difficult making a confident decision that comes with a very high price tag. While you can’t know every sign that could point to a poor purchasing decision, you can keep your eyes peeled for these somewhat common warning signs that could make you pump the breaks on your next house or property purchase.
If you are looking at a home that is situated in a neighborhood that doesn’t have everything you need, it could be a warning sign of a bad decision. Be sure the home you are looking at has the schools you want, as well as plenty of green space. If trails are important to you, be sure to find a neighborhood that is well connected to the Chicago or suburban trail system. If you don’t drive to work, assure the neighborhood has plenty of public transportation nearby.
Too Many Projects
If you are looking at a home that touts itself as a “fixer-upper”, be sure you know just how many projects you will be undertaking upon closing. It can seem fun to make a home just the way you want it, but if you haven’t completed a home improvement project in the past few months (if at all), taking on a home with too many weekend projects could start to become a money trap.
If the house or property you are interested in gets a poor report from the inspector, slow the process down. Work with your real estate attorney as you develop a plan for correction with the current owner. If you try to do this without an experienced attorney, you run a real and significant risk of purchasing a home that is dangerous or full of potential structural problems.
Before you begin your home purchasing process, partner with the team at Bell Law. Our attorneys are ready to assist you and advocate for your best interests as you search for your next property.