Intro to Home Buying vs. Leasing

If you are on the fence about buying or renting, let me break some facts down.

As a first time home buyer, one should note closing could take 2-6 weeks. Moving in is subject to closing but there are work arounds. Closing is contingent on the lender and how fast they can close after you get an "inspection" and an "appraisal".

The first step to buying a home is to get a preapproval letter or provide me, your realtor with proof of funds in some official form. If you need assistance with a lender, I provide you with contacts to interview but I always recommend starting with your bank. I have found people paying $2000-3000 a month for rent often do not realize they could be paying equity onto their own home. 

Once the home is finalized and there is a contract executed, a buyer should get an inspection is to do a complete overview of the subject property. Inspections cost about $400-600 (single family house) upfront depending on which type you choose. Some cover more details than others. The inspection will tell you all the things big and small. For example, if the house had a pool you would want an inspection of the pool and equipment as well. This is done in the option period so you can decide if you want to continue.

Next the appraisal is ordered by the lender. This is to ensure the loan is good for the property. It gives the bank a number to know that they are insured if they had to turn around and sell it due to foreclosure. If you decide to buy, you will need Earnest Money and Option Fees to secure the contract all which is credited back to you at closing.

The Option Fee is non refundable because you are paying for the "option" to buy out of the contract during the time period stipulated on the contract.

Earnest Money, however, is fully refundable. Example, you put a contract on a home and find out after inspection the roof needs to be replaced and the seller does not want to change it. You can cancel the contract and get the Earnest Money back, but NOT the Option Fee.

Option fees are usually $200-300. Earnest is 1% of contracted price.

We also want to negotiate a Home Warranty at the expense of the seller on any home.

You also want to get estimates on the insurance. I ALWAYS recommend flood insurance for your home regardless if your  house of interest flooded or not. You need peace of mind. 

If you are renting you get nothing for it in 5 years, maybe not even the return of the deposit. If you buy, you will gain that equity back when you resell. In some cases recently we are seeing equity build fast!

Now that I have explained all that, you need to consider if you want to buy or rent. Once you decide that and "where" you want to do either, we can begin looking after we have signed the buyer representation agreement.

What is the buyer representation agreement? This is an agreement to represent you as a fiduciary on the specifics outlined according to the "Market Area". This could be a specific area or county or as specific as one address. The agreement insures after that all the hard work I put in, I will get paid to represent you, the buyer.

Let me know if you have any questions. I would be happy to consult with you on your search and see where you are in the buying process.

CAT