PURCHASE A NEW HOME IN 10 EASY STEPS
- If you don't know where to begin when purchasing a new
home, the process may become lengthy and frustrating. However, if you first spend time on some calculated planning and decision making before beginning your search, the process can actually be an enjoyable one.
- 1. Start With Research. Talk to friends or family about their new home purchasing experiences, and become familiar with the housing market through varoius housing related publications, articles, and websites. Attend local home shows such as the Parade of Homes. This will help you to learn more about the latest housing features and building techniques. If you need help getting started, contact either a Builder, a Builder's Sales Representative, or a Realtor.
- 2. Decide What Type of New Home You Desire. Begin by listing features that match your lifestyle. For example, do you prefer a one story home or multiple levels? You may want an open kitchen, a formal dining or living room, or maybe a large yard. If you know what you want, it helps narrow your search. You may want to consider contacting a Builder about purchasing a piece of land and "Design / Building" a new custom home, specially tailored to your needs and lifestyle.
- 3. Determine Your Price Range. There's nothing more demoralizing then deciding on a $250,000 home and learning that your price range is closer to $200,000. First, get your finances in order. Buyers have to be able to prove they can afford the mortgage on the new home they desire. (Typically, with a written pre-approval from a lender). Sometimes a poor credit history or an unstable employment history can be a barrier to securing a mortgage. Determine the down payment potential that you have (Typically 10% of the price of the home), and estimate the mortgage payment you can afford. Generally, your mortgage payment should not exceed 33% of your total gross monthly income.
- 4. Select a Neighborhood. Location is a key consideration when purchasing a new home. Talk to people in the neighborhoods you are considering to find out if they enjoy living there. Identify whether an area meets your needs. Do you prefer the convenience of the city, or the solitude of the country? If getting to work quickly is a priority, drive to and from work from the area you have selected, to determine the peak traffic flow. Also consider schools and daycare facilities, police and fire protection, frequency of trash collection, and potential nuisances such as airports.
- 5. Select a Builder. Contact your local Home Builders Association and ask for a list of Builders who build new homes in the area you have selected. Visit a variety of Builder Model Homes, and if possible, talk to Owners of the specific Builders' homes to identify whether they are satisfied with their new home purchase. You may also ask friends or family for recommendations.
- 6. Sign a Purchase Agreement. Once you find the new home you want, you'll be expected to submit a deposit and sign a Purchase Agreement. Read the agreement carefully to be sure you understand and agree with all of the terms associated with the purchase.
- 7. Secure a Mortgage. Educate yourself on the lending process. Contact various lenders to identify the best interest rates. Rates may change daily, so be sure your information is current and correct. You might also consider an adjustable rate mortgage (ARM) where your interest rate fluctuates based on a national index such as the Treasury Bill Rate.
- 8. Prepare for the Walk-Through. The time to identify any problems with your new homes construction is during he Walk-Through (Typically refered to as Punch-Out Items). Don't be afraid to look at every detail in the home. Your Builder would rather be made aware of any problems before settlement, rather than three months later. Ask how to care for all interior and exterior surfaces and ask for all Owner's Manuals for appliances and amenities.
- 9. Complete the Settlement Process. Settlement (Typically refered to as the Closing) passes Ownership of the home from the seller to the buyer. During Settlement, buyers must sign numerous legal documents. The process can become confusing or difficult to follow. However, there will be an Attorney present to help guide you, plus you have the option of hiring your own Attorney. If there are items during the process that you do not understand, ask questions and get answers to your satisfaction. After Settlement, be sure you have copies of the Sales Contract and all Settlement Documents.
- 10. Resolve any Post-Move-In (Warranty) Problems With Your Builder. Rarely do buyers experience a problem with a new home after purchase. If you do have a problem, always talk to your Builder first, and give him or her a chance to make corrections (A reasonable length of time according to what other commitments a Builder may have at that particular time). It is especially helpful to put your concerns in writing, specifically identifying the problem, it's location, and when it may occur. Most Builders will wholeheartedly honor the quality of their work and will be happy to remedy the situation for you.
- And above all, don't forget to celebrate your new home purchase. A new home is the best investment you can make, and will provide you with enjoyment and memories for years to come.