Spotting Deal Breakers in the Home Buying Process
Wouldn’t it be amazing if purchasing a home was as easy as learning your ABCs? Unfortunately, buying a home can be a long process of uncertainty. To help you get through it easier, I have listed some dos and don’ts to help you avoid obstacles that may keep you from your dream home.
Don’t Undermine Your Mortgage Pre-approval
One common reason for a real estate deal to fall through is that home-buyers do not fully understand the mortgage process. Pre-approvals do not always mean you will get the loan.
To help you dodge making a mistake in the process, I have broken down what happens after you receive your pre-approval letter and move forward with the purchase:
- The file is sent to the processor, who will look over your information and the appraisal. They will put it all together and send it to the underwriter.
- The underwriter will determine whether or not you are a credit risk. They will assess your ability to repay the loan, your credit, and the collateral – which would be your home – used to secure the mortgage. Before funding the loan, the underwriter will perform a “soft pull” of your credit information to see if there are any changes.
- If you want to get your loan, do not do anything that might change your financial position, which may ruin your final approval. Do not shop on credit, do not switch jobs, do not fall behind on your bills, etc. And that Ferrari you’ve had your eyes on will have to wait until after closing.
Read and Reread all HOA Documents
When the home you are purchasing is governed by a homeowner’s association (HOA), you will have tons of paperwork to read and approve. There may be stumbling blocks in the fine print, so it is important to get on this task as soon as the documents are received, even if these documents are a big snooze-fest.
Look for information about liens against property, current litigation against the HOA, the builder or the developer, and any red flags in the HOA budget. It would be a shame to move in and then find out you actually can’t park your Semi Tractor Trailer in the street.
These documents can be difficult to read and/or understand, so ask questions and it may even be worth the money to have an attorney look over the documents for you to spot any deal killers.
Don’t let the Home Inspection Get You Down
All homes have problems. You must understand this or else you could be facing a failed real estate deal. Try not to ask for unreasonable repairs, such as a missing tub stopper or a change in doorknob style. Choose a home that has small or easy-to-fix problems. If you are too nitpicky, you may be pushed aside by a less-bothered buyer.
Be Sure to Accurately Budget
Pay attention to all communication, especially from your Lender. They will be providing important information on the costs involved in closing on your new home. As a buyer, you may need a down payment in addition to fees, pre paid taxes and insurance required before the house is yours.
First, you will receive a Loan Estimate. Take note of the “Calculating Cash to Close” section, which concludes with an estimated cost to close the loan. Speak with the lender if you find any problems in this section, especially if you cannot come up with this money. Right before closing, you will receive the “Closing Disclosure,” which is similar to the estimate but it has the final amounts.
For the most part, real estate deals end in a successful home sale! I will help you keep your eye on the prize and avoid the common faults that can derail transactions. For a stress free real estate transaction, take it slow, keep your expectations realistic (do you really need a replica of the Trevi Fountain in your backyard?), and heed my advice. Everything else should fall into place.
Do you have any questions or need any assistance buying or selling a home? Contact me for a call or meeting today!
Diane Waschenko
(914) 447-5847
diane.waschenko@cbrealty.com