Islands Real Estate Company

So, you have decided to buy a home. Whether you are a first time homebuyer, upsizing, or downsizing, the process can be a bit overwhelming. Even if you have previously purchased a home, you may need a refresher as the business is constantly changing. This information has been assembled in an effort to familiarize you with the process and answer some of the usual questions that come up.

"Where do I start? Should I shop on line, look at ads or ride around and look at homes?"

Well maybe. If you're not in a hurry, then looking at neighborhoods to find one you like and becoming familiar with them is a good idea. Also, looking at ads for homes helps you to know about what prices homes are going for.

The best starting point however is determining what price range home to look for. Unless you are paying cash, you will need to determine what price range you are comfortable with. There are many mortgage calculators available online (such as the one at http://www.islandsrealestate.net) which can help you to determine what your payment would be.

The best way to start the process is to have a reputable mortgage company pre-qualify you for a loan. I highly recommend you take this step first. You are not obligated to use the same mortgage company when you actually buy, but it can really help you to know if you need to make any adjustments to your financial status such as taking steps to improve your credit scores which can reduce your interest rate and monthly payment. Also, by knowing what price range to shop in saves you time by narrowing your search. The other advantage to being pre-qualified is that when you find the perfect home, you are ready to make the offer immediately without having to worry if you will qualify and how much your payments will be. The lender will coach you on the types of loans available and the costs involved.

"How do I find a reputable mortgage company?"

First of all, it really is important to use a mortgage company you can trust. With recent changes in the real estate contracts in Georgia, it is important that the company follows the timelines in the contract to prevent you from losing your earnest money in the event that you are turned down for the loan. Also, you don't want to be surprised at the closing table so you want to work with someone you can trust. You can find a number of good companies by asking your REALTOR®, an attorney or your friends and family about who they have had good service from. Consider using your personal bank or credit union. You may need to shop around to get the lowest interest rates and closing costs.

"What are the costs involved in buying a home?"

Up front:

Earnest money: When you get ready to make an offer, you need to be prepared to write a check for earnest money. The purpose in providing earnest money is to let the seller know that you are making a serious offer. It is usually held in a trust account by the real estate company until closing at which time the buyer is credited with this amount at closing. The contract you use to make your offer spells out what happens to the earnest money in the event that the offer is not accepted or the sale of the home doesn't close.
Appraisal Fees: The mortgage company you use will usually require that you pay for the appraisal fee up front in the amount of $300 or more.
Home Inspection: Be prepared to pay $250-400 or more for a home inspection if you choose to have one.

At closing:

Closing Costs: You should receive a good faith estimate from the mortgage company letting you know how much you will need at closing. This includes everything from mortgage company fees for the loan to attorney's fees to VA funding fees. If you have been pre-qualified for your mortgage, you will know how much to ask the seller to pay in closing cost when you and your REALTOR® are negotiating an offer.
Escrow account: Most mortgage companies require an escrow account to be established so that the taxes and insurance are added to the monthly payment and are then paid by them at the end of the year. They will usually require you to pay several months of taxes and insurance to be held by them. The mortgage company will help you to estimate this amount. These expenses are called "prepaids" and are in addition to other closing costs.
Down Payment: The amount, if any, you are paying down on a home. You may not need a down payment depending on which type of loan you obtain.
Miscellaneous: Moving Expenses, deposits for utilities, fixing up your new home, etc.

Okay, enough about finances! Now you are ready to search for your perfect home.

"How do I find the home that meets my needs?"

There are lots of ways to find homes for sale. Online is a convenient way to start. Realtor.com is a good resource. Picking up magazines and newspapers can be good but may be out of date. Of course driving around and looking is fine but you can miss many homes for sale this way. If you do see a home you are interested in, it may be better to call the REALTOR® you are working with instead of the listing agent to get more information to avoid giving away valuable information about your situation. The best way to save time and frustration is to sit down with your REALTOR® and let them help you to find all the homes which fit your criteria by using the MLS (multiple listing service).

The MLS has search features that can be used to find homes using criteria such as price range, geographical area, square footage, # of bedrooms or baths and any other specific features you want, however, if the specifications you want don't come up with any results you may have to adjust your requirements.

The MLS also has data on what other homes similar to the one you want to buy have sold for. When shopping for the home, make sure you do your homework and that you are happy with all aspects of the home, neighborhood, and the costs involved.

"How do I find a real estate agent that can meet my needs?"

Look for an agent who is familiar with the area where you want to buy. You also want to consider the agent's qualifications, years of experience and designations. When speaking with agents, look for some-one who you feel comfortable with. Ask around for recommendations.

"Do I need my own agent to represent me?"

This is a question that only you can answer. One good resource is the "ABCs of Agency" handout that can be obtained from any Georgia REALTOR®. This will explain how agency representation works in Georgia. It will not cost you any more to have another agent involved since commission is usually paid by the seller.

"Once I find the home I want to buy, what is the next step?"

It is now time to make the offer. The purchase and sale agreement can seem overwhelming but using an experienced REALTOR® can make it much simpler. You will want to determine how you will structure your offer by considering what you want to pay, if you want to ask the seller to help with closing costs and what type of mortgage you will be applying for. Other questions you will be asked is if when do you want to close, which attorney to use, if you want a home inspection and if you want any stipulations or contingencies. All of the terms of this contract are negotiable between the buyer and the seller. The REALTOR® you are working with can help you to make your offer as attractive to the seller as possible and increase the chances of a successful transaction. Once you make the offer, the seller has the option of accepting the offer or making a counter offer back to you for you to consider.

"Once my offer is accepted, what do I need to do?"

When both parties have come to an agreement, you will need to fulfill the obligations of the agreement. The REALTOR® will help you throughout the transaction and keep you informed of the steps you to take such as obtaining insurance, etc. They can also help you to locate professionals you will need such as home inspectors, etc. who make the process to work smoothly.

"Is there anything else I should know?"

Yes! This guide is not meant to be all inclusive of all the situations that can arise in the process of buying or selling real estate. However, working with a REALTOR® you can depend on will help you immensely in making the process go as smoothly as possible. Call Islands Real Estate Company at (912)884-5862, we're your local experts.