Whether you’re buying a home in Syracuse, Buffalo, any suburb of Central or Western New York, or really, anywhere in the world, it’s important that you know what you’re in for. The Rich McCarron Team works to make sure this process is as painless as possible, and with a few tips, we can prepare you to close on YOUR new home with ease and avoid any major setbacks in the process.
Step One: Know What You Can Afford
When buying a home, it’s imperative to have some idea of what you can reasonably spend on monthly mortgage payments, while accounting for utilities, living expenses, and any unforeseen events that would cause you to start dipping into your savings. When a buyer starts shopping for a home before they know their budget, they often get their hopes set on that dream home just to have their hearts broken by the bank denying the mortgage application. Or worse…the bank approves the loan and the buyer has to choose between buying groceries or heading into foreclosure. Is your dream home worth starving yourself or avoiding fun events? Probably not. Any house can be your dream home with a few personal touches and the right Realtor to negotiate the best price.
Step Two: Find a Realtor
We know a few Realtors. You can learn about them here. Picking the right Realtor is critical. You want someone who will work in your best interest. You don’t need someone pushing you to buy a house that isn’t right for you or telling you to raise your price point if you want to work with them. You need someone who will understand your must-haves, your definitely-nots, and your it’d-be-nices. Our agents can set you up on an automatic search that will aggregate all your criteria and send you notifications of listings that match for you to review.
One of the benefits of our structure is we have a team. Certain agents only work with buyers and certain agents work with sellers. This avoids a conflict of interest when an agent tries to push buyers to only buy one of their listings. Agents who do this often do not have your best interest at heart. Another benefit of The Rich McCarron Team’s structure is that we’ll hold daily meetings where seller agents will talk about any new listings they have so that buyer agents can have the most information to know if they should bring their buyer to it.
Step Three: Get Financed
You can use any bank you want for your financing, but do your research as to which bank will give you the best rates. Some lenders will even help out with your down payment when you enroll in their First Time Home Buyer program. These vary from bank to bank, but often, they will automatically deposit a portion of your paycheck into an account for 10-24 months and then match a certain amount when you close on the home. This can be a great benefit to those using Conventional Financing, as it can get you closer to the 20% equity needed to avoid paying Private Mortgage Insurance (PMI). For those looking to put less money down, you can use FHA (Federal Housing Administration) Financing. This requires less money up front, but you will pay PMI until the house is completely paid off. Often, your Realtor will be able to help you find the best lender for your situation. We’ve partnered with a few lenders that always ensure the transaction is smooth.
Step Four: Find Your New Home!
This is the fun part. You’ll see lots of houses, so it might be beneficial to take pictures as you go of things that stick out to you. If you’ve been searching for a while, look back at the pros and cons of everything you’ve seen…are there consistencies? Do you keep looking at raised ranches even though you find you don’t like the layout? Do you always love homes with large kitchens? Let your agent know these things! They want you to buy a home with everything that matters most to YOU. As you go, make note of the neighborhoods as well. Are the other homes in the neighborhood well maintained? Are you near stores you’d like to have nearby? Parks? Public Transportation? Do you like the school district? Your dream home often depends on more than just the physical aspects of the house.
Once you find one you can see yourself in, have your agent research comparable sales in the area. Make note of updates needed or things you feel will help negotiate a better price. You can make an offer on any property, but you need data to justify your price. Ultimately, the choice to accept or decline an offer is on the seller, but a well reasoned offer is much more well received and likely to be countered than a low offer with the comment “This is what we’d like to pay”. Buying and selling a house is a business negotiation and data will always stand stronger than emotion.
Step Five: Get A Home Inspection
Home inspections are important. You don’t want surprises when you move in. Sometimes you’ll find obvious things like electrical spliced together outside of a receptacle or water damage in the ceiling, but would you know mold in an attic crawl space if you saw it? Or if the crack in the foundation was from natural settling or an actual structural issue? Even a completely flipped house could be hiding less-than-stellar workmanship. The contingency of a home inspection allows you to walk away from an unsatisfactory home before these problems become yours. Often times, an agreement can be reached where certain repairs will be made or credits/price reductions will be offered for the buyer to take care of the work themselves.
Step Six: Get Your Loan
In step three, you found the loan officer you plan to use and were pre-qualified for a certain amount, but now that an offer is formal, the bank needs to make sure you can hold up your end of the transaction. They’ll run your credit, verify your employment, and work out your monthly payment to ensure you’ll be able to pay them back.
At this time, be patient and do not make any major financial changes. Do not open any new credit cards. Do not lease a new car. Do not finance furniture for your new house. DO NOT QUIT YOUR JOB. You don’t want to lose your new home over a change in your credit score.
Step Seven: The Home Is Appraised
The bank is a business and they are lending you money. With that said, they don’t want you to overpay for your home. They aren’t going to give you $500,000 for a home that is only worth $150,000 plus the extra $350,000 you offered because you REALLY wanted it. If you’re paying cash, you can offer whatever you want. But if you default on your mortgage payments and the house is now owned by the bank, they need to be able to sell it to someone else and recoup their loss. This can be beneficial though because if the bank thinks you’re overpaying, you can renegotiate the purchase price to get the deal to stay together. A seller can refuse to budge from the purchase price, but chances are, if your bank doesn’t see the value in your purchase price, another bank won’t either and the price will need to be reduced for any sale to be completed.
Step Eight: WAIT
This is the worst part of buying a home. Lots of work is being done behind the scenes and you will hear nothing. THIS IS NORMAL. In this time, underwriting is being done and there is nothing you can do to speed the process along. Everything is being done to make sure all i’s are dotted and t’s are crossed. Be patient. During this time, no news is good news.
Step Nine: Paperwork
Once the appraisal has been filed, underwriting is done, and a commitment letter is received, the lender will arrange for a title company to draw up the paperwork for the sale of the house and the filing of all this paperwork for the new owner. When you meet with your attorney to sign all this paperwork, expect your writing hand to hurt.
Step Ten: Closing The Sale
You get the final communications…whether by email or a phone call, your attorney will schedule closing with you. You will sign all the paperwork and receive the keys to your new home. The hard part is over and you can pop the champagne!
Step Eleven: Moving In
This is the part where you take YOUR stuff and put it in YOUR house. That sounds good, right? It’s a good feeling. But we’ve included this step for a reason….don’t forget the little things. Get the locks changed. Program your thermostat (especially if the house has been vacant and set to conserve energy!).
So if you’ve made it this far, you haven’t been scared out of the process and decided to rent for the rest of your life. Congratulations! Now, let’s get the process started. Click here to get started on your search and let The Rich McCarron Team guide you to YOUR new home!