As a first-time home buyer the process of simply LOOKING at homes can be exhilarating ... seeing the possibilities, dreaming of making a home your own ... the process can be fun. But finding the right home for YOU is just the beginning of making it YOURS.
The U.S. Department of Housing and Urban Development (HUD) recently provided an exhaustive list of common questions from the first-time buyer's perspective. Below is the last in a series of articles offering answers to these questions. This week's focus is on making an offer and closing the deal.
When I find the home I want, how much should I offer?
Answer: Again, your real estate broker can help you here. But there are several things you should consider: 1) is the asking price in line with prices of similar homes in the area? 2) Is the home in good condition or will you have to spend a substantial amount of money making it the way you want it? You probably want to get a professional home inspection before you make your offer. Your real estate broker can help you arrange one. 3) How long has the home been on the market? If it's been for sale for awhile, the seller may be more eager to accept a lower offer. 4) How much mortgage will be required? Make sure you really can afford whatever offer you make. 5) How much do you really want the home? The closer you are to the asking price, the more likely your offer will be accepted. In some cases, you may even want to offer more than the asking price, if you know you are competing with others for the house.
What if my offer is rejected?
Answer: They often are! But don't let that stop you. Now you begin negotiating. Your broker will help you. You may have to offer more money, but you may ask the seller to cover some or all of your closing costs or to make repairs that wouldn't normally be expected. Often, negotiations on a price go back and forth several times before a deal is made. Just remember - don't get so caught up in negotiations that you lose sight of what you really want and can afford!
So what will happen at closing?
Answer: Basically, you'll sit at a table with your broker, the broker for the seller, probably the seller, and a closing agent. The closing agent will have a stack of papers for you and the seller to sign. While he or she will give you a basic explanation of each paper, you may want to take the time to read each one and/or consult with your agent to make sure you know exactly what you're signing. After all, this is a large amount of money you're committing to pay for a lot of years! Before you go to closing, your lender is required to give you a booklet explaining the closing costs, a "good faith estimate" of how much cash you'll have to supply at closing, and a list of documents you'll need at closing. If you don't get those items, be sure to call your lender BEFORE you go to closing. Be sure to read our booklet on settlement costs. It will help you understand your rights in the process. Don't hesitate to ask questions.
If you are looking to purchase your first home, Friedrich Iowa Realty can help. If you would like to set up an interview with one of the agents at Friedrich Iowa Realty to discuss your options, please give us a call at 515.232.6175, toll free at 800.681.7333 or stop in our offices at 100 6th St. in Ames. We look forward to chatting!
ABOUT FRIEDRICH IOWA REALTY
Friedrich Iowa Realty has worked with buyers and sellers of houses, condos, patio homes, townhouses, multi-family units and commercial real estate in central Iowa since 1927. The independently owned affiliate of Iowa Realty offers 30 Realtors®. Learn more about Friedrich Iowa Realty online at GreatIowaHomes.com, on Facebook at facebook.com/GreatIowaHomes and on Twitter @GreatIowaHomes.