Be Ready To Act
Let me tell you a true story that happened to me, Brian Habel. This was back when I was going to real estate school and my father was handing over his business, after being a real estate agent for 8 years. I was buying a house here in St. George and going to real estate school. I had talked to some mortgage people and just assumed that I could afford a certain price range. After looking for months, I realized, when it came down to it that I could not afford a house as expensive as what I had been looking at. Imagine my feeling. All that time, all those houses, all that energy- wasted. Not to mention my pride was wounded, “How could I be so egotistical, in thinking what I had thought, without checking in to what my financial situation was allowing me to do?
So, when I encourage my people to get pre-qualified, it is based off personal and professional experience. WE really do waste a lot of OUR precious time AND the precious time of others by not getting that pre-qualification process in place.
Get Pre-qualified first- This takes only 10-15 minutes and helps you establish your top price range to enter on real estate searches.
Pre-qualification vs. Pre-approval- To see what the difference is between them.
PLUS, most sellers will insist on at very least a pre-qualification letter from your mortgage/bank, showing you are a legitimate buyer. Sellers have realized that if they don’t do this, they will have taken their house off the market for up to two weeks (with no compensation) when the buyer backs out due to finding out they don’t have what it takes when it comes to financing. A simple phone call can get you Pre-Qualified. Follow this link to our Preferred Lenders to see what resources we have for you in place right now to get this SIMPLE step DONE.
#2- Be prepared with Earnest Money, Down Payment and Closing Costs
Go to this link to understand the Difference Between Down Payment & Earnest Money
The standard earnest money payment is 1% of the purchase price. So, if it is a $250,000 house the earnest money down would be $2,500. If it is a $450,000 house the earnest money down would be $4,500. On something like that it would not be too uncommon to round down to $4000. So, 1% is an approximate number. Now, new construction can be a different story. It all depends on the market conditions and that particular builder, if more earnest money will be required and if that builder decides to make it non-refundable or not, up front.
A down payment is how much cash the buyer has to come up with, in agreement with his Lender. In most instances this will either be Zero, 3%, 10% or 20% and then the lender agrees to come in with the rest of the money. How much you'll need for your down payment will really depend on which loan program you qualify for. Go here now to get pre-qualified to find out what loan programs you qualify for.
Don’t forget the closing costs the buyer has to pay, which will mostly be costs associated with getting a loan, but can include taxes and insurance and escrow services which are more minor. This is a totally rough estimate, but expect about 3-4% times the purchase price of the home. So, take for example 3.5%. A home that costs $200,000 X 3.5% = $7000 in closing costs. The total cost will fluctuate depending on your loan product AND if you have a lender that is not over charging you and if you are throwing on top the taxes, insurance, escrow or other "outside the loan" costs. So, a safer bet might be at least 4% overall.
#3- No realtor commissions are charged the buyer’s side, only when you sell a house- Seller pays for both sides.
To see why it is a no brainer to hire your free buyers agent, that does not cost you any more, but only helps you get the home most often for a better deal, go here- Realtor Commissions.
#4- Property Search- Save Time, Be Educated
One of the best things you can do as a buyer is to get on to a good property search solution and get a feel for how fast houses “move”. Here you have advanced tools:
- Automated Email Updates, get instant notification of new listings and any price reductions.
- The ability to save properties to a Favorites Property Notebook, and the ability to Save Searches.
- It is important to note, that getting any notifications on your favorites when there is a price reduction can help you act faster than anybody else.
Our website search solutions is the best in that it:
- Renders listings faster than the rest. No waiting around when your life requires this be quick!
- Also it is updates every 5-15 minutes. People hate when there is false advertising, none of that here!