I am thinking of buying a home. What should be my first steps?
The first thing is to be qualified by a mortgage broker to determine what you can really afford together with taxes, home insurance and monthly mortgage payments. There is no point in falling in love with homes that do not fit in the parameters of what you can realistically afford. If you do not mind purchasing a home that needs a lot of work, you can also see if you are eligible to get a construction loan if that is a route you would consider taking. It is important to be clear on what your options are, so you can enjoy home ownership with all its benefits. The next step is to find yourself an accomplished real estate agent who is going to find you a great house and negotiate the best possible price for you. You want someone who is knowledgeable, has a proven track record and is going to educate and prepare you for what is involved in purchasing your dream home. You want a realtor who is effective in your search, guides you and does not waste your time with homes that do not meet your needs. This is an important investment; be happy and excited—homeownership is great!
What is the risk of purchasing a “for sale by owner” home?
Buyers do not really know what they are getting themselves into. Too often buyers are overpaying for homes that they could have gotten much cheaper or in better condition, but because they are getting it direct “by owner” they think they are getting a deal. I have seen several buyers make big mistakes taking this route. The excitement of buying a home may make you overlook other issues. Most buyers are not savvy when it comes to purchasing a home despite TV shows on HGTV.
The home may have a variety of deficiencies that the homeowner is not sharing with you or would not necessarily come up during an inspection. A good realtor is aware of the many issues that can arise during your purchase, and will find out as much about the property and its history using tools that only realtors have access to, which help us do our best to make sure you are getting the most for your buck and getting a sound investment.
What is a short sale? Are there any risks in this type of purchase?
A short sale is when a homeowner owes more on the mortgage than what the house is worth. Purchases of this kind can be well below market value. However, it is a very lengthy process. The banks still move very slowly and it can take between four months to over two years in many cases. Many homeowners do not make it easy to show their house because they are in no rush to leave. Usually there is much neglect and disrepair and the buyer is responsible for purchasing the home in “as is” condition; banks do not give credits or do repairs. They do not remove underground oil tanks either, so the risk is on you, including getting a fire C of O and any other certifications needed to close. Usually cash is king and trumps other competitive offers. This is a purchase that is not for the light-hearted. There are no guarantees that you will automatically get the house once your offer is accepted. The underwriters or investors may make other demands. The BPO (best price opinion) is not always accurate. Time and a lot of patience are needed to make the deal.
Fortunately, there are a lot of great deals on homes for sale, on the market by regular homeowners. I am a short sale specialist, but my suggestion is you first try having your realtor negotiate a deal for you on a regular purchase, before you venture into the lengthy process of a short sale.
Nicole Idler NJ/NY Associate Broker of Friedberg Properties actively lists, sells and rents in Teaneck, Bergenfield, Englewood, Tenafly, and New Milford and all over Bergen County. E-mail her with your questions at [email protected] or call her on her cell: 201-906-9338 or work- 201-894-1234. Call Nicole Idler and make home ownership a reality!!
By Nicole Idler