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Steps & Finances Involved in Buying a Home cont.

Steps & Finances Involved in Buying a Home cont. Step #2: Determining Preference What else to consider besides financial readiness and location when shopping for a home:

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Steps & Finances Involved in Buying a Home cont.

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  1. Steps & Finances Involved in Buying a Home cont. Step #2: Determining Preference What else to consider besides financial readiness and location when shopping for a home: Types of housing desired:1. Single-family dwellings: houses detached from other units2. Muti-units: duplexes and townhouses3. Condominiums: ind. owned units in a building with several other units (homeowner’s fees – monthly fees)4. Cooperative housing (co-ops): apartments5. Manufactured housing: units assembled in a factory

  2. Steps & Finances Involved in Buying a Home cont. Step #2: Determining Preference cont. • Commuting distance • Service availability (water, sewer, roads, cable tv) • Taxes • Size and quality • Zoning laws and covenants

  3. Steps & Finances Involved in Buying a Home cont. Step #3: Finding a Home, Making an Offer • Real Estate Agent or Broker – offers services to buyers and sellers of property • 6% commission • Show homes, present an offer to the seller, negotiate prices, assist in the obtaining of financing, and represent the buyer at closing • Buyer’s Agent: represents the buyer not the seller • Home Warranty: provides additional protection to the buyer

  4. Steps & Finances Involved in Buying a Home cont. Step #3: Finding a Home, Making an Offer cont. • Making an Offer • Binder or earnest money: security deposit by the buyer as evidence of a serious offer • Escrow: earnest money held by the mortgage lender until closing • Contract: terms and conditions are outlined, 1st legal document between the buyer and seller

  5. Steps & Finances Involved in Buying a Home cont. Step #4: Getting Financing • Less than 10% of home buyers pay cash for a home. • The higher the down payment the lower the amt. of the loan and subsequently the lower the monthly payment. • Title: legal right of property ownership, transferred from the seller to the buyer • Abstract: written history of property’s ownership • Deed: document that transfers property ownership

  6. Steps & Finances Involved in Buying a Home cont. Step #5: The Closing • Closing – meeting in which real estate is transferred from seller to buyer (settlement) • Fees are associated w/ the closing, documents are signed, and the title is passed • Mortgage insurance will be required if the buyer makes a down payment of less than 20% • Points – type of closing cost, fees paid to the lender at the closing (1% of total loan) • Closing occurs in the office of the mortgage lender or attorney

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