The Home Buying Process
Buying a home can be overwhelming and probably will be your biggest purchase that you make. To provide some guidance and make the process easier, provided below is an organized list of steps to purchasing a home in Bergen County, New Jersey.
Whether you are a first-time home buyer or entering the marketplace as a repeat buyer, you need to ask why you want to buy. Are you planning to move to a new community due to a lifestyle change or is buying an option and not a requirement? What would you like in terms of real estate that you do not now have? Do you have a purchasing time frame?
Whatever your answers, the more you know about the real estate marketplace, the more likely you are to effectively define your goals. As an interesting exercise, it can be worthwhile to look at the questions above and to then discuss them in detail when meeting with our expert agents at Village Homes Realty.
Home buyers can maximize their advantage by developing a relationship with Realtors who will keep you informed of new listings and who will negotiate the best price and terms for you.
Our real estate agents know the communities they work in very well. They know the best locations, traffic pattern, access to commuting and in general, the best locations within a community. They have access to computerized multiple listing of homes and can do much of the screening to find homes that are within your financial means. Many also have access to "private" home and condo listings through links among their affiliated offices.
3) See What You Can Afford – The Financial Decision
Purchasing a home is one of the biggest decisions you will make in your life. As soon as you’ve decided you want to buy a house, make certain you have a clear picture of your financial situation. One of the first steps you may want to consider is to calculate the affordability of renting versus buying. Being pre-qualified for a loan determines how much house you can afford. It also allows you to move more swiftly when you find the right house, especially when you aren't the only interested buyer.
This may give you some insight into whether or not now is the right time for you to buy a home. Consider the following steps:
- Get a credit report to make sure there aren't problems in your credit and correct errors in your credit report if there are any.
- Do an analysis of where your money comes from and where it goes. Develop a household budget for your current situation and analyze how a house purchase will affect it.
Try not to add on any new debt. Since mortgages are based on debt to income ratios (the amount you pay out monthly versus the amount you bring in) new debt could throw the ratios off and make a previously approved mortgage unobtainable. Prequalify for a mortgage to determine how much you can afford.
4) Make a Wish List -- Finding that Perfect Home
We want to hear about your needs, wants and interests in a home. Tell us what you're looking for:
- Neighborhoods - What type of community atmosphere are you looking for?
- Home features - What features are priorities, and where are you willing to compromise? Do you prefer a home in perfect condition or are you looking to save money on a diamond in the rough?
- Commuting - How far are you willing to travel? Do you want to be near public transportation?
- Lot settings - Do you prefer a small, easily maintained lot in town or a larger, more rural setting?
- Home styles - Colonial? Contemporary? Split level? Ranch? Are particular styles more appealing to you?
- Price Range - Do you want to buy at the top of your range or leave yourself more of a cushion.
Love beautiful, sprawling lawns or hate to mow? Find fix-up fun or never held a hammer? Top schools a must or are the kids all grown? What one person’s dream home is might be anthers “out of the question.” When deciding on the right house for you, it’s good to differentiate between needs and wants.
Take some time to develop a list of needs and wants. Ideally your home will have all of your needs and as many of your wants as is practical. Also, by going through this exercise, you will make sure that you will be making "apples to apples" comparisons once you begin the house-hunting process.
- Enough square footage for comfortable living
- Enough bedrooms to accommodate your family
- Adequate number of bathrooms
- Eat-in kitchen
- Garage or basement for storage needs
- Lot size to accommodate children’s play area
- Proximity to a specific school
- Proximity to Houses of Worship
- Access to bus/train commuting
- Wood floors
- Carpeting color, paint color, exterior color, roof color, etc.
- Pool or Jacuzzi (unless for medical reasons)
- Bay windows
- Built-in entertainment center
- Brass lighting fixtures
- Skylights
- A pretty view
- Quiet street
This is the fun part! Village Homes Realty agents will start your search for homes in your price range. If you are looking in towns new to you, our agents will provide lots of information -- as well as drive you around to show you the area and give you a feel for the community.
Our Agents watch the market closely and we will contact you immediately about new listings that match what you’re looking for. Our goal is to help you find the home you're looking for and negotiate the best price for you.
Our Agents can provide detailed information on almost any property currently listed for sale in the area that you are looking, whether it is listed by Village Homes Realty or another real estate company.
If you see a "For Sale" sign on a property or an ad in the newspaper on a property that interests you, ask our agents to help you get all the details including the price, description, special features, and the financing terms. Then ask us to set up an appointment for you to see the property.
Since the agent that you are working with will already be familiar with your housing and financial needs, there is no reason to go through the process again with someone else. This will save you time and take the hassle out of house hunting… and, it won't cost you a penny more!
Be careful about calling ads! Please note - ads are sometimes created to make the phone ring! Many of the homes have some drawback that's not mentioned in the ad, such as traffic noise, power lines, or litigation in the community. What's not mentioned in the ad is usually more important than what is. For this reason, I want you to be very careful when reading ads. Remember that the person writing the ad is representing the seller and not you! The most important thing you can do is have someone on your side looking out for your best interests. Our agents will critique the property with an eye towards how well it meets your needs and will point out any drawbacks you should know about. So whether you decide to work with me or not, pick an agent you feel comfortable with and enlist the services of that agent as a buyer's broker. Then you become a client with all the rights, benefits, and privileges created by this agency relationship, and you're no longer just a shopper. Did you know that many homes are sold WITHOUT A SIGN ever going up or an AD EVER BEING PUT IN THE PAPER? These "great deals" go to those people who are truly committed to working with one agent. When an agent hears of a great buy, who do you think he's going to call? His client, who he has a legal obligation to work hard for you, or someone who just called on the phone and said "keep your eyes open"? So to get the best buy on a property, find for yourself the right agent and stick with them.
6) Making An Offer
What’s involved in making an offer?Have you found the house that meets most of your needs and dreams, you’ll probably find yourself getting emotionally involved. You may imagine moving your furniture in, planting flowers, and envisioning your first big holiday party. But try not to get too attached prematurely. There are a number of steps you must take before you’re holding the keys in your hand, and you need to think clearly and objectively at this point so that the offer you make is a realistic one.
You will be expected to submit a check, usually $1,000 as earnest money at this time. The owner, in turn, may accept, reject, or make a counter-offer. Because counter-offers are common (any change in an offer can be considered a counter-offer) it is important for you as a buyer to remain in close contact with your agent during the negotiation process so that any proposed changes can be reviewed quickly. Your purchase offer will be carefully prepared and presented by our agents.
What is a proper offer?
There are a number of factors that will affect the offer you make. Supply and demand, the condition of the home, how long the house has been on the market, and your personal circumstances with regard to how soon you need to close on a home all come into play when framing your offer. You might also weigh in the demand for the home and how much you really want it. If you “low ball,” some sellers will react with a counter offer; others might dismiss your offer outright. In an active market, you’re likely to lose out by making a low bid. If multiple bids are anticipated, it’s advisable to go with your “best offer.” Your agent will advise you on ways to make your offer more attractive: for instance, a mortgage credit approval and flexibility on the closing settlement date can help make your offer stand out and ultimately close the sale. Your agent will help you think through all of these issues so you can determine what is the best offer for you to make at the time.
When you find a home you want, we will negotiate the best price possible for your purchase. A home seller can accept your offer, reject the offer, or make a counteroffer.
If the seller counter-offers, you may agree to that price, or make your own counter-offer. If your offer is accepted, your "earnest money" will be placed in a trust account. It's generally applied to the purchase price when you complete the purchase.
In New Jersey, although not mandatory, it is a prudent, typical practice to hire an attorney for the closing of real estate. An accepted buyer offer leads to a legally binding purchase contract. The contract is a signed agreement between the seller and the buyer. Attorney review in the state of New Jersey is considered three business days, but can be extended. During the three-day attorney review, either party can cancel the contract.
As a buyer in New Jersey, you are responsible for hiring and paying for a home inspector. The home inspection should be ordered within 14 days of the contract being signed. Usually it is done as soon as attorney review ends. A number of inspections are common in New Jersey residential realty transactions. They include inspection for termites, wood-boring insects, a radon inspection, mechanical and structural inspection. Attorneys order the title insurance, survey and record the deed. During these examinations, an inspector comes to the property to determine if there are material physical defects and whether expensive repairs and replacements are likely to be required in the next few years. Such inspections for a single-family home often require two or three hours, and buyers should attend. This is an opportunity to examine the property's mechanics and structure, ask questions and learn far more about the property than is possible with an informal walk-through.
What if the inspections turn up problems?
Any home inspection issues should be addressed immediately after inspection results are received.
Few homes are perfect. Some problems may be a matter of simple cosmetics; others may be more serious and call for costly repairs. The good news, however, is that in most cases the seller and the buyer are able to come to terms. You and the seller may decide to compromise, with both sharing the costs of repairs or the seller may pay for any repairs. Or you may decide that the issue is not important enough to risk losing the home.
At this time in the process, you as a buyer have already been pre-approved for a loan and the final mortgage commitment is being awaited. Typically, this process can take up to 30 to 45 days before a final written mortgage commitment is received. Whatever time frame is specified in the contract of sale, normally after 10 business days, the balance of usual 10% deposit is due. Your attorney will also start the process of ordering the survey, and title work.
11) The Final Walk Through
Always do a final walk-through after the sellers have moved, but before you go to closing. The final walk-through is not the time to do a home inspection. It's simply an opportunity to make sure that the home being conveyed to you is the home you agreed to buy. Also make sure that all items the sellers agreed to leave are indeed there. If the condition of the home has changed since your offer to purchase, you are in a better position to get the problems handled when you bring them to everyone's attention before the deed changes hands.
Technically, two separate closings occur at this time: the closing of your mortgage loan and the closing of the sale.
What to expect:
Settlement is a brief process where the necessary paperwork needed to complete the transaction is signed. Closing is typically held at the buyer's attorney's office, with both buyer and seller at the same table, sometimes with each party completing their paperwork separately. The buyer traditionally arrives 45 minutes earlier to handle the mortgage paperwork. Title to the property is transferred from seller to buyer. The buyer receives the keys and the seller receives payment for the home. From the amount credited to the seller, the closing agent subtracts money to pay off the existing mortgage and other transaction costs. Deeds, loan papers, and other documents are prepared, signed and filed with local property record offices. Please see Buyers Estimated Closing Costs within this web site.
- You will review and sign the HUD-1 settlement sheet and other loan documents.
- If everyone agrees that the papers are in order, you submit a certified or cashier’s check to cover the closing costs and the balance of funds due (if applicable).
- If the lender will be paying your property taxes and homeowner's insurance, a new escrow account is established.
- You receive the keys to your new home.
- The closing agent will record the mortgage and deed at your local government clerk’s office. When the deed is recorded, you become the official owner of the home.
