Ok so you found the perfect home, and its time to make an offer. You and your Realtor need to draw up the contractual offer. If the seller accepts it, then the house is pretty much going to be yours. This is a very important step. You will need to rely on the loan program you have at your disposal and intend to use, as well as the Realtors knowledge of what homes are actually selling for in that area. You will need to rely even more on your Realtor if the property is bank owned. They will know what offers the banks have been entertaining in that area as well as how many other offers have been received so far.
Now is where the education that you have learned about the loan programs and your Realtors expertise REALLY comes into play. One thing that most first time home buyers do not know or don't even realize, is that in addition to any down payment that the loan program you are going to use, you will also be responsible for the closing costs associated with the buying transaction. Lets get one out of the way. You will NOT be responsible for compensating the Realtor for their services. That falls upon the seller, be it private owned or bank owned. You will be responsible for title charges, home owners insurance, property taxes, and any other closing costs related to the financing of the new home. So how much will those be? Title charges are calculated based on the county the property resides in and the proposed financed loan amount. Home owners insurance can be obtained by simply calling a local home owners insurance agent. You will need to assume that the full annual premium for the insurance will need to be collected. Property taxes are a little more tricky. It will be based on how often the taxes are collected in your county (quarterly, bi-annually, annually) and when they are due next. Rest assured that the seller cannot sell the property unless the taxes due are current and paid. You will only be responsible for securing the full years impound account less what has already been paid.
All that being said you can ask for SELLER CONCESSIONS when making your offer to cover any and ALL of these costs. It will depend on the loan program you are using as to how much you can ask for, but it ranges from 3% of the purchase price to unlimited! I have closed MANY purchases for my clients where instead of having to bring money to the closing table they got money back!
This is a double edge sword though. If you ask for a lot of seller concessions you most likely will not be able much less on the sellers asking price. If you do have money saved up for a down payment and closing costs then go for the gusto and try to and wheel and deal using your Real Estate professional. This is another example of why you need to get your PRE-APPROVAL letter early so you know what concessions are allowed with the loan program you are using to help you negotiate a better sale.
Keep in mind that with your Realtors help virtually everything can be negotiable. If minor repairs are noticed either during the viewing of the property or after the HOME INSPECTION you can request these be remedied. You can even ask that some things you see in the home when you view stay and are part of the contract. For instance if your wife likes the drapes, you can ask that they stay. Or if you like the pool table in the basement you can put it in as part of the purchase. If the home is vacant make sure that you don't assume that what you see will stay. Make sure your Realtor lists anything you want to stay that isn't "bolted" down. Remember that some homes are professionally "staged" to show better and that the items shown may not be available to negotiate.
Ok so your offer is accepted and your new home is "in contract". Now its time to move along to the next page. LOAN PROCESS.
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