First time home buying can seem pretty intimidating for most people. It’s a big commitment and the most expensive purchase the vast majority of us will ever make. The good news is that Team Howlett can really help first time home buyers!
I really LOVE working with first time home buyers. All those years of being a music teacher
and being a mom are skills that really translate well into taking good care of my younger buyers. I get very protective of my first time home buyers. I’m usually talking them out of a house! I certainly never have even remotely tried to talk anyone into buying a house.
Here’s my buying a house 101. The first step is to have a phone conversation with a reliable lender. You’re not applying for a loan at this point. Your credit will not be pulled. You will not be spending any money. You are just starting the conversation to see what you qualify for and what your approximate monthly payment would be. There are many good lenders out there, but here are four that I have loved working with.
- Carrie Johnston
- Approved Mortgage
- Rob Roseboom
- Lafayette Savings Bank
- Mark Johnson
- Purdue Federal Credit Union
- Reyna L. Arteaga
- Regions Mortgage
After talking to a lender you are “pre-approved” or have found out what you need to do to get pre-approved. Then we go an find you a house. That’s the fun part! I recommend if you’re searching on the internet to use www.realtor.com or www.shook.com. Zillow and Trulia tend to be more inaccurate. Once you find the right home, then you make an offer. The offer is accompanied by an earnest money check that is usually about 1% of the sales price. The sellers can do three things with your offer. They can accept it, reject it or counter it. The most likely scenario is that they will
counter your offer. If everyone comes to an agreement, then the house is “pending” and several important things need to happen. Any offer is contingent upon getting approval of your financing, having a home inspection and obtaining home owners insurance for the property. You’ve already talked to a lender, so that usually isn’t a problem. You’ll have to go through the loan application process, which frankly is a real pain, but since you already know you are pre-qualified, that usually isn’t an issue. Getting home owners insurance is a piece of cake too. The big problem is the inspection.
In Indiana, the buyers pay for a home inspection. That’s usually between 250.00 and
350.00 depending on the square footage of the house. Once you get the report back we’ll go over it together. This is where my husband and business partner Eric really takes over. He built houses with his father in his younger days and spent years on a Submarine as the Engineer officer. He understands the systems of a house very well. What we can asked to be fixed are “material defects”. That means serious problems. Bad roof, unsafe wiring, leaking plumbing, wood rot, etc. We can’t ask for maintenance items like caulking the tub. Then we write up something called an inspection addendum and it’s like we’ve gone right back to the beginning of the transaction. The seller can agree to fix everything, agree to fix nothing or agree to fix some of the repairs. Once again, the third option is the most common. If you are not satisfied that the house is safe to move into or feel that the repairs are too expensive, you can leave the transaction and not buy the house.
Remember that earnest money I talked about? It will be a credit to you. Let’s say that you ask the seller to pay your lender closing costs. Let’s say you ask for 2,000.00 and the actual lender closing costs (appraisal, origination fee, etc) come to 2,200. Let’s say you put down 1,000 in earnest money. Well, 200 will go towards paying the rest of your closing costs and the rest will go towards your downpayment. You get this earnest money back if for some reason you fail to qualify. (someone loses a job before the house closes for instance) You get this earnest money back if the seller won’t fix needed repairs to your satisfaction. The only reason that you would not get it back is if you change your mind at the last minute. That is called defaulting. Then the earnest money goes to the seller to compensate them for being off the market.
I know this is a lot of information. Please feel free to call me (Meg) at 765-414-6531 if you need clarification or have other questions.
Also visit www.teamhowlett.com to see my buyer video. It’s pretty much the same stuff, but clients seem to think it helps.
We’ll be right by your side every step of the way!!!!