Looking for a new home is an adventure. Knowing how to buy a home takes some research. While most buyers will start their home search by going online and browsing, the real first step is to find out what you can afford. Understanding your affordability can be straightforward for some and tricky for others. Knowing your budget will save you time and frustration. The home buying process should be easy and comfortable.
Buying a home is one of the most complicated purchases for most people. It's not an everyday purchase and that's what makes it so complex. Laws that guide the sale of real estate are constantly evolving. Working with the right team of experts will make a difference in your experience. Buying a dream home should be a dream, not a nightmare. Here's a list of what you'll need:
The due diligence period is perhaps the most important part of any contract for a buyer. It allows the buyer time to do all inspections and investigate anything about the property. Beyond its physical condition, the buyer can also review documents associated with the property in order to decide if the buyer wants to proceed with the purchase. Once this period has passed only specific contingencies protect the buyer from having to move forward with the purchase.
A certificate of occupancy, or a CO, is document issued by the local municipality. It states that a property can be legally used for the purpose in which it is zoned. For example, a single family home would be certified to be inhabited for living, or a commercial retail store would be certified that it is allowed to be used to sell products to the public (assuming any other licenses needed were in place). A CO is issued to new properties and a CCO is issued for properties when they change hands, as in sold or rented. Every local government has its way of handling CO's. In some areas, an inspector will have to visit to verify that the property is in appropriate condition. In other areas, homeowners can self certify.
There are 7 types of loans for buying property. Each one has its purpose and specific rules. Knowing which loan is right for you is a matter of examining your future plans to the best of your ability. This includes how long you plan to stay in the property you are planning to buy and if you would sell that property when it's time to move on or hold it as an investment. Making the correct choice will result in saving a large sum of money. The 7 types of loans are:
Presenting an offer to purchase a home will vary from state to state. This article will go over the common practices for NYC and NJ. In all states it is recommended that you hire an attorney to advocate on your behalf with respect to the sales contract. There's a noticeable difference in the cost of hiring an attorney in NYC vs. NJ. Perhaps the biggest difference in the two areas is the offer and contract of sale. In both areas a real estate agent can prepare an offer on behalf of a buyer.
A contingency is a condition that must be met in order for a contract to be legally binding. In most cases, buyers set contingencies to protect them from having to perform on a contract if something doesn't work out as planned. The most common contingency is a mortgage contingency. Often contracts will allow the buyer to obtain a mortgage commitment by a set date in order to fulfill that condition. If the buyer is unable to obtain that commitment on time, then the contingency will protect the buyer from having an obligation to the seller. Other common contingencies include:
Every real estate transaction should have a reasonable amount of Earnest money deposit from the buyer. Earnest money deposit is commonly known as the down payment when a mortgage is involved. This deposit can range anywhere from as low as 1% of the purchase price to any percentage, up to and including, 100%.