One of the most exciting times in a person’s life is when they buy a new home. Whether it is your first or fifth house, there’s nothing like the feeling of finding a new place for you and your family to call home. However, as many of life’s big events can be, it can also cause a lot of stress as you go through the process. From the financing to the search for the home to the moving, it’s no wonder that so many people become overstressed when they decide to buy a new home.
One of the ways to minimize the stress is to properly plan. This is not an event that should be taken lightly! Another important tip is to find the right professionals to help you through the process. This is not something you need to go through alone! For more helpful information, continue reading.
According to Greg McCown of HOME Real Estate, “Today we’re enjoying what many agents consider a more “normal” market. The tax incentives of last year were great for their purpose, and that’s a debate that continues today—that they didn’t create many buyers but worked to compress the already existing market into a prescribed time frame. Once the incentives dried up, so did much of the selling season last year. We’re seeing a relatively active market that reflects the performance of past years. The more recent trend is that buyers, with instant access to the market through the Internet, react more quickly to market trends and are more aware of accurate pricing. The market just moves faster today than it did even a few years ago.”
“It’s a buyer’s market now,” says Sandra Larsen with BancWise “With low rates and lower market values, it’s a great time to buy a home. On the other side, sellers struggle with accepting a low offer, but if they are priced according to the market conditions to start with, they will have a successful sale.”
Looking for new homes can be overwhelming, especially if you don’t know exactly what you are looking for. It’s important to sit down with your family (and your Realtor) and come up with what is most important to you, including factors you can’t live without, those you would like to have in a new home and those bonuses that won’t be deal breakers, but that might help you make the decision between two homes you are considering. When making this list, make sure to consider not only where you and your family are in your lives right now, but also where you will be in the future. It’s possible that you are choosing the home you will live in for the next ten to twenty years, and your lives may look very different at that time.
Some things to consider are:
–Are you planning on expanding your family? If so, how many bedrooms will be necessary?
–Are you reaching the ‘empty nest’ stage? If so, will you need as many bedrooms as you currently do?
–Do you need room for hobbies or a home office? Will these needs be changing in the future?
–How important is energy efficiency? Do you want to move into a home that already has energy-efficient features?
–How important is location to you? Would you be willing to settle for a home that did not have all the features you wanted if it was in the ideal location? On the flip side, would you be willing to sacrifice location if the home was perfect in all other ways?
–Does anyone in your family have health issues? If so, would you prefer a home all on one level to avoid navigating stairs?
–Is there someone in the family who is capable of snow removal and yard work, or would you be more comfortable in a home where this is taken care of by a neighborhood association?
Working with a Realtor
“Working with an agent allows the seller and/or buyer to utilize the Realtor’s knowledge, expertise, experience and resources which are not available to the general public,” says Sherri Walker with HOME Real Estate. “When purchasing or selling a home, many legal documents are required and the lender may need additional information and the Realtor is available to assist and handle all components of the transaction.”
“Your agent is not just an expert in marketing, sales or even negotiating,” comments Greg McCown. “Today’s agent has to be familiar with all aspects of the home buying and selling process. Current interest rates, various lending programs, contractors and covenants are just a few areas that agents must be knowledgeable in. But today, one of the most important functions is their first-hand experience of the market. They know pricing, condition and trends and can help as consultants as you make one of the biggest financial decisions of your life. Also, you agent is a well-trained professional and may see something in a particular property that alerts you to a problem, or conversely, a hidden value that you as a buyer may overlook. Your agent is the objective third party observer, another set of eyes and ears who is not caught up in the emotion of the purchase of your “dream home”. Many times the excitement of the transaction clouds the buyer’s ability to see the big picture. Your buyer’s agent is bound by strict ethical guidelines to provide you with the best information on your behalf. There are also a myriad of details that need to be addressed in every transaction. An agent knows the process inside and out and many times takes care of these details without your knowledge that they even needed to be done. Your agent makes the experience an easy one so you can concentrate on getting yourself or your family moved with the least amount of concern.”
“Realtors can save you time and money be screening out homes that do not fit your criteria, negotiating the best price and following the process through to closing,” says Sandra Larsen with BancWise. “Honing in on market conditions related to the property you want to buy or sell is one of my favorite things to do!”
“Today, buyers are very savvy,” adds Donald Kracke with United Country, First State Realty. “They do a lot of homework and think they know exactly what they want in a new home. However, once they actually start looking at homes, they sometimes find that they don’t really know what will work best for them. I find that many times I take more of a consultant approach with my clients and help guide them in the direction of what they really want and what will work best for their budget, lifestyle, etc.” Nathan Lamp echoes that by saying, “A good agent, in my opinion, never hard sells their buyers into a buying a home. We are there to be a consultant to that buyer and to provide them with correct, up-to-date information.”
Of course, choosing the right agent is a very important part of the home buying process. “I suggest interviewing a few agents,” says Greg McCown. “Open houses give you a unique opportunity to talk face to face with a variety of agents from across the market. Ask some leading questions and let the agent fill in the blanks for you. Your agent should show genuine interest in your needs and provide you with the information you need. If you find a good rapport with an agent, don’t be afraid to ask more specific questions regarding their expertise…every agent will bring a variety of different experiences and personalities to the table and you should choose one who speaks to your needs and communication style.”
“Helping buyers find the ‘right home’, whether first time buyers, to move-ups, to downsizing is such a rewarding experience,” comments Deb Wagner with Woods Bros. Realty. “I love that I have the opportunity to personally get to know clients which makes residential sales the best fit for me. Not every buyer understands the process. They believe they need to contact each listing agent to view the properties they are interested in. It’s best to establish a relationship with someone you trust to journey with you and who, after viewing properties with you, will best understand your needs.”
One of the key processes of buying a home is having it inspected by a professional. When you have found the home you love and put in an offer, the offer is usually written “contingent upon a satisfactory home inspection” and the buyer then contacts a home inspector and arranges for that person to enter and inspect the house. Upon completion of the inspection, the inspector meets with the buyer at the property to walk through the house together, point out areas of concern and answer questions the buyer may have. The inspector then provides a written report to the buyer, the buyer’s agent, and usually the title company handling the transaction. If the buyer feels the house is no longer for them, they have an opportunity to walk away from the purchase, having only invested the cost of the home inspection.
“The whole house inspection, and any additional inspections such as radon need to be completed soon after the purchase agreement is signed, usually ten to twelve days,” explains Rick Hamik with The HomeBiz Inspection Team. “The termite inspection needs to be completed within 30 days of the closing date.”
According to Randy King with King’s Home Inspections, “It is important to know the condition of the home from a third party unbiased point of view. The inspector has no interest in the house and is able to give an unbiased opinion on the condition of the property, the average life expectances of various systems in the house and what you will likely be facing for upgrades and replacements in the first five years, years 5-10 and longer.”
“Choosing a certified inspection company is the first of many companies you will need in your network to purchase and care for your home,” says Hamik. “Do your homework. Call and interview home inspection companies. Ask friends. Check with the Better Business Bureau. Do the same kinds of things you would do before you purchase a car, television or computer. Most inspection companies have a network of people they use for your inspection, a second inspector, an HVAC company or pest company.”
“Along with your whole house inspection, be sure to request radon testing,” suggests King. “Radon is prevalent in eastern Nebraska, and it is important to know if your home has a radon problem. The only way to know is to test; you cannot tell by looking, age, location, etc. Even if you are not personally concerned about radon and its cancer-causing effects, when you go to sell the house some years later, you will have to disclose that it has had high radon levels, and you may face having to install a Radon Mitigation System at your expense.”
You can also work with a home inspection company for “pre-listing” inspection, where the inspector goes through the house and lists things that are defective, health or safety concerns, and also points out cosmetic details that could improve the chances of the house selling quickly. “When the seller repairs the listed items, then a report is prepared and provided, along with a yard sign saying ‘Pre-Inspected by…”, and the inspection report is used as a marketing tool to help them sell the house,” says King. “The number one fear in buying a home is the unknown: buyers are afraid they are going to get ‘The Money Pit’. By utilizing pre-inspection, the fear of getting a bad house is minimized and the hurdle to the purchase is removed.”
“For most people, purchasing a home requires financing,” explains Kevin Frenzel with Liberty First Credit Union. “If your credit score is not up to par, you may be forced to accept terms that are not favorable or a good fit for your financial situation. Some helpful hints to keep in mind if you are considering applying for a home loan are to clean up your credit history by reviewing your credit report and checking for any discrepancies, be realistic about what payment you can afford and that works with your current budget, know the 28/40 rule (generally speaking, about 28 percent of your gross monthly income can go toward your house payment), use a down payment (more is better) and get pre-approved before your home search begins.”
“Now is a great time to be looking to buy a home whether it is your first home, upsizing, or downsizing,” states Mike Barrett with Cornhusker Bank. “Interest rates are attractive with 30 year rates below 5% and house prices affordable. My advice to those looking is to meet with a banker to get pre-approved prior to seriously looking so you how much you can afford and make sure the payment fits within your budget. Many lenders offer free pre-approvals.”
When you are ready to talk to a mortgage lender, you should have items ready to bring with you. “There is a lot of talk about underwriting standards increasing to the point that many borrowers are not getting approved,” says Barrett. “We are fortunate we live in Lincoln and many homeowners did not do sub-prime loans and housing values are stable. As long as a borrower has good credit, debt ratios and a down payment, then financing is still readily available. The area that has changed the most is the amount of documentation required. Many of the items the borrower submits need to have third party verification which makes the loan process a little longer than in the past. We ask for the following documentation when meeting with a potential client: most recent paystub(s) verifying one month’s earnings, W-2 Forms and complete Federal Tax Returns for the most recent two years; most recent statement (All Pages) for: checking, savings, money market, stock, mutual fund, IRA, 401K and any other liquid asset accounts (if applying for FHA or VA financing please provide the last two statements); if you have ownership in a partnership or corporation, provide copies of the corporate tax returns and K-1s for the previous two years; if income is from sources other than employment or self-employment, include award letter, pension statement, IRS 1099 and complete federal income tax returns for the most recent two years; if you have been a party of a legal proceeding, please provide a copy of any documents showing evidence of your rights to additional income or obligation of additional payments resulting from the action (i.e. if divorced, copies of the Divorce Decree and Property Settlement Statement) and a copy of your driver’s license.”
When it comes to available loans, there are a number of different options and one is sure to suit your needs. “We offer conventional secondary market, VA, FHA, NIFA, 30 year, 20 year, 15 year and adjustable rate mortgages,” explains Barrett. “We also offer in-house portfolio loans and jumbo loans.”
“Liberty First offers a variety of mortgage loans to meet your financial needs,” adds Frenzel. “We have some mortgage programs that are only available to credit unions and we also recently rolled out our 10-year fixed rate mortgage loan for those who’d like to get their home paid off sooner. With the great rate, it’s more affordable than you might think.”
Once your home is purchased, it’s time to start thinking about moving in! However, before you hire the moving company, you might want to consider taking a bit of time to do some work on the new home before you move everything in. “The best time to paint a home is when it’s empty, so scheduling us on closing day or the day after will help us give you the best possible price,” says Matt Larsen with Larsen Painting. This is also a good time to either tear up carpet and refinish wood floors or put in new carpet and do any other repairs, redecorating or remodeling as you won’t have to worry about moving furniture, ruining any of your belongings or having to live in the house while you’re trying to complete a project that can be disruptive.
Once everything is set, it’s time to plan the move! Working with a moving company is the easiest and most reliable way to get everything moved with very little work on your part. “When you take the time find and hire a reputable moving company, you can remove a lot of the stress on moving day,” says Jason Christensen with Two Men And A Truck. “You will know that your belongings are being moved by trained, professional movers. In addition, you will have some recourse if there is damage to your items or to your home on moving day. You’ll likely be on your own if the friends you paid to move you with pizza and beer drop your new flat screen TV.”
“I would suggest contacting at least two or three different companies before you make a decision on which to hire,” continues Christensen. “Movers in Nebraska are regulated so the basic structure is the same for all companies, but the rates may vary. Also, don’t make your decision based on price alone, pay attention to how they deal with you on the phone or in your home if they come out to give you as estimate. If they are difficult to deal with before you’ve even hired them, you can be sure they will be difficult to deal with if you have any problems such as damage to your property. If you have friends or family who have moved recently, find out who they used and what kind of experience they had.”
“In Nebraska, local moves are charged for by the hour,” Christensen concludes. “Anything you can do in advance to save time will also save you money. This would include things like disconnecting electronics and appliances, disassembling beds and generally being ready to move when the day comes.”
The process of buying a new home is an exciting and often stressful one. By working with the proper professionals, you can keep the process as stress-free as possible and find the home of your dreams.