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Your Guide to Home Buying

Your guide to home buying is below. Please contact Kim Cooper with your questions, or if you need assistance buying a home in North Idaho:
  1. EXPLORE FINANCING OPTIONS: Talk to lenders. It pays to shop around for loan terms. Try a local bank, credit union and mortgage company.  Let them each know you are shopping and seeking the best terms. Although some fees will appear the same there are negotiable fees in most original proposals. The loan originator (some call them loan officers) will help you determine what size loan you may qualify for but make sure you are comfortable with the monthly payment.  Keep in mind that you will also need to pay property taxes and insurance as well as budget for incidentals like replacing appliances, water heater or furnace.  Those things do wear out.

  1. WANTS vs. NEEDS: Make a list of all the things you need in a home, not just what you dream of.  Some of the items you want may have to wait while finding what you need. The number of bedrooms, bathrooms, garage stalls, proximity to schools, etc. – are paramount to finding a suitable home. Stone counter tops or hardwood floors are something you may budget for later.

  1. FIND AN AGENT:  Interview several REALTORS®.  Make sure their work schedule will accommodate yours. Find out if you will work directly with them or if they will just assign you to a “team member” who you haven’t met. Will they show you everything, even call on For Sale By Owners (FSBO)? How do they prefer to communicate, text, email or telephone? Is their communication style and work schedule compatible with yours?

  1. FORMALIZE THE RELATIONSHIP: You will want a Buyers’ Representation Agreement which clearly states how the relationship will work; what can you expect from the agent and what the agent will expect of you, the term of the agreement and how the agent gets paid.  It is customary for the agent to be paid from the seller’s proceeds. If your agent will solicit FSBOs and the seller will not pay the broker’s required commission, you may be asked to make up the difference. Some brokerages may require a retainer or hourly fee.  Make sure you understand the compensation before signing the agreement.

  1. TOUR THE AREA: Check out different neighborhoods or areas to make sure they are places where you would be happy.  Are they close enough to schools, shopping and places of worship? Do the Home Owners’ Association’s (HOA) Conditions Covenants and Restrictions (CCRs) allow the types of activities you like?  Can you restore cars or run a home based business there? Are there restrictions on pets?

  1. SEARCH FOR HOMES: Be proactive in your search. Don’t just rely on the REALTOR® to find a home for you. If you see something you like contact your agent right away to get the details.  A good REALTOR® is likely working with several buyers and can’t always be watching their computer for new listings.

    Ask your REALTOR® to set up a search robot to send you listings.  If your search is programmed with an ASAP feature you can receive new listings the moment they are entered into the Multiple Listing Service. These may be listings your agent has not seen yet.

  1. MAKING AN OFFER: Once you find a home that suits you and your lifestyle it is time to prepare an offer. Ask your REALTOR® to value the proposed property based on recent sales of similar homes in the neighborhood.  They will advise you how much to offer based on current market conditions and the length of time the home has been on the market. If the home has been on the market for longer than the average it may be over priced or have other issues.  Only you can decide which issues are important to you.

  1. THE PURCHASE & SALE AGREEMENT (PSA): Your offer will detail not only the price of the home, but also requirements with specific time frames.  Earnest money is usually provided with the offer to prove you are serious about your intent to purchase. The seller will want to know that you are able to perform and will usually require an approval letter from your lender or proof of funds if you are paying cash.  If things don’t work out as detailed in the PSA you may be entitled to a refund of your earnest money. Some time frames to be identified are below.

  1. INSPECTION: Make sure you request a home inspection even for new construction.  An inspection may uncover items overlooked during construction or defects that have arisen over time in a previously occupied home even if it is well kept. You may want to interview several inspectors to find one you are comfortable with.

    If your inspector discovers defects the seller refuses to repair you will have the option to move forward anyway or end the transaction and recover your earnest money.

  1. ESCROW: What title company will you use to transfer the deed and insure it? Escrow is the process of transferring the Deed and other documents related to the purchase.  At escrow you will sign binding documents to complete the sale. An Owner’s Title Insurance Policy will guarantee the accuracy of those documents and the premium is usually paid by the seller.  If you are borrowing you will provide title insurance to your lender as well.

    You may pick the title insurance company or your agent may recommend a list for you to choose from.  When identifying the title company you will also offer a date for “closing” when you know your finances will be available and the seller can have the home ready for you to occupy.

  1. GETTING THE KEYS: Closing occurs on  the date the documents are recorded at the courthouse in the county where the property is located.  It is only after the recording occurs that you will have the right to move in unless otherwise negotiated with the seller.  Closing will usually occur within 24 hours of signing at escrow.

Congratulations!  You are now a home OWNER!

If you have questions please contact me here: kim@kimcooper.com