One of the first steps every newly, married couple faces is the purchase of their first home together. With this big purchase comes many questions. To help sort through some of those questions and the purchasing process I sat down with Realtor Kersten Bowman of Livin' Right Real Estate. Kersten is a licensed Realtor in both Florida and Alabama. She specializes in Residential Real Estate and is one of the top selling agents along Florida's Emerald Coast. She is currently expanding her footprint into Alabama and hopes to find equal success along the Gulf Coast.
How do we know we are ready to buy a house?
You married the person of your dreams and you are ready to start a life together. To buy a home, or not to buy a home is the next question that often comes to many young newlywed's minds. My initial response to any first time home buyer is, "How long will you be in the area?" For tax purposes, it is beneficial to own a primary residence for a minimum of two years. If this fits into your timeline, take the plunge! Real estate, more times than not, is one of the most secure financial investment options.
Once we decide to we are ready to buy a home, what's next?
Once you decide to purchase a home, your next step will be to find a lender and review your finances. Feel free to shop around for a lender you feel comfortable with (Aim to discuss your options with 1-3 loan officers before making your decision). A lender will be involved in your real estate transaction just as much, if not more, than your Realtor. Find a lender that thoroughly explains the lending process to you, is easily accessible (not only from 9:00AM- 5:00PM ) and has competitive mortgage interest rates. I personally suggest using a local lender, however many lenders are licensed in all states and can work with you from a distance.
How do we find a Realtor and how do we know the Realtor is a good fit for us?
The best way to find a Realtor is through referral! If you do not have any referrals in the state you will be located in, ask a friend or family member if they have a Realtor that can help you locate an agent in that specific area. You want a Realtor that works with you AND for you. Find a Realtor that thoroughly explains the buying process, answers your phone calls or promptly returns your phone calls, and knows the market area well. To keep it simple, have him/her explain to you their duties and you explain to him/her your expectations before beginning a working relationship.
Time to Shop!
Your lender will pre-approve you for a loan and begin communication with your Realtor if they have not already done so. This will help you decide on a budget according to the monthly payment you can afford. Once you have decided your budget, talk with your spouse about a wish list. You may want to visit a few open houses to get a realistic feel for what your budget can buy in your area. Please note, that if you are working with a Realtor during this time, it is polite to inform all parties of this fact while shopping. Once you have your wish list, begin working with your Realtor. He or she will help continue your search, make appointments to view the homes that are convenient with your schedule, and advise you on how to and when to make an offer on the home you choose.
NEVER feel pressured to sign a contract. Review and understand all of the terms. Do not hesitate to ask your Realtor any questions during this time. Once both parties have agreed to the terms and the contract has been fully executed, escrow begins. A typical closing involving a loan can take 30-45 days.
How much should we be prepared to put down on a house?
Depending on the type of loan you qualify for will determine how much money you are required to put down on a home. Some loans, such as a VA Loan, require 0% down. Other loans can require up to 20% down. A licensed lender can help you further answer any financial questions. One thing to note is the earnest money deposit, often referred to as Trust Money or an EMD. This is required to be put down on a home within three to five business days once the contract has been fully executed. This amount can be negotiated, however it is typically 1% of the purchase price of the home. It will be held by the Title Company in an Escrow Account.
If you have more questions about purchasing a home or are in need of a Realtor you can contact Kersten for information or referrals. She would love to help you start your new life together in a new home!
Kersten Reed Bowman
Lead Residential Sales Associate
Licensed in Alabama and Florida