Buyer’s Guide
Whether you’re a first-time home buyer or investing in your next property, our buyer’s guide will walk you through every step we’ll be taking together. As realtors, we know one of our biggest responsibilities is to keep you informed and prepared for this process. That’s why we prioritize making sure our clients are confident they understand their obligations as a buyer and are comfortable asking questions if they don’t. We hope you’ll use this resource to gain an overview of what it takes to find, pay for, and close on a new home.
Financing a Home
Budgeting & Building Credit
Save Money & Estimate Your Payment
- Financial advisors recommend that your mortgage + other debt payments (such as on a car, student loan, or credit card) be no more than about 1/3 of your income.
- Use an online mortgage calculator. Remember: this is an estimate! Actual mortgage lenders will offer you rates after reviewing your finances.
- Don’t forget that you’ll need some extra cash for home inspection fees, closing costs, and a down payment.
- Important facts to know: There are certain loan types that allow for a higher debt-to-income ratio depending on your financial situation, and there is flexibility when it comes to down payments (no longer is 20% your only option). So if a home seems out of reach financially, please take the time to get in touch and let us go through lending opportunities.
Build Good Credit
Your credit history is a key factor lenders use to determine your mortgage interest rate. In the months leading up to when you wish to buy a home, avoid:
- Changing jobs
- Getting a new bank
- Making major purchase (like a car or furniture)
as all of these may negatively affect your credit score.
Mortgage Pre-Approval
What is mortgage pre-approval?
In order for a lender to determine whether they will offer you a home loan, they conduct a review of your loan application and finances. This includes checking your credit score, confirming your employment and income, reviewing bank and tax statements, and investigating your assets. If you meet their requirements, they may offer you a letter of pre-approval stating what amount they are willing to loan you. This will both give you an edge at the negotiating table and help you search only for homes you know you can afford.
Shop Around
Every lender will have different terms to offer you, and it’s to your advantage to request quotes from different entities and for different scenarios. For example, experiment with what 15, 20, or 30-year terms look like. By getting estimates from multiple lenders, you’ll be able to make an informed decision on whom you’d like to borrow from. We will also happily refer you to trusted mortgage professionals in the Asheville area.
Tips for Mortgage Approval
- Keep your job & your bank!
- Don’t miss a payment on any current debts or credit cards
- Be truthful on your loan application
- Don’t originate any credit inquiries
- Avoid big purchases or deposits
- Save money for closing costs
Important Note
Pre-Qualification is different from Pre-Approval.
The Search
Finding Your Ideal Home
It’s time to decide what you’re looking for.
And what you’re willing to be flexible on.
Happy homebuyers ask themselves: what can I compromise on? Your dream home at the perfect price may be out there… but it’s best to be prepared to be flexible. We find that if you’re willing to be open to different options, you’re much more likely to be satisfied with what’s on the market. Write down your “wants,” and then identify anything that’s a “need.” We’ll keep these priorities in mind as we search.
Once you’re ready, we’ll talk about your goals and desired home features, walk you through how to view listings online, and set up a schedule to view any properties you’re interested in.
Showings
Shopping for homes can be exciting, interesting, and tiring. A few tips to keep in mind as you begin viewing potential homes in-person:
- Take notes and ask questions! We strive to be as transparent as possible about the advantages or disadvantages we see in a property and are happy to address any concerns you may have right off the bat.
- Don’t schedule too many showings for one day.
- Keep a list of properties you liked, and as we narrow your search we
can return to those homes for a closer look.
Making an Offer
The First Step Toward Closing
Our clients always come first, and we want you to feel comfortable and confident through this process.
1. Offer
Once you’ve decided on a home that you’re happy with, you and your Heartwood agent will submit an offer to the seller. We’ll draw up a contract and determine a competitive offer based on market research, then you will approve the offer and we’ll go over all contracts that need to be signed before we proceed.
2. Response
The seller will then accept, reject, or offer a counter to your offer. Be prepared to negotiate, as most of the time, sellers will not accept your first offer outright. Remember that you will be a more competitive negotiator if you have a letter of pre-approval from a mortgage lender.
3. Contract
If an agreement is reached and an offer is signed, both parties are now engaged in a legally binding contract. Being “under contract” may sound scary – but it means that you’re one step closer to owning your home!
Home Inspection
What you Need to Know
Once you become under contract, we strongly recommend that you hire a professional home inspector.
The inspector will evaluate the property, and this evaluation can be a clause included in your offer contract. The goal is to provide you with an objective and unbiased analysis of your potential new home’s physical condition, including safety issues that may be hidden from view.
What will the home inspector evaluate?
- Electrical systems
- Plumbing
- Insulation
- Water source & quality
- HVAC systems
- Walls, floors, ceilings, etc.
- Roof & foundation
- Evidence of harmful substances such as lead, radon gas, or asbestos
Additional inspections such as septic, well, or pest may be recommended. We can provide guidance on which are advisable for specific properties.
- Relinquish the offer if major problems are discovered.
- Renegotiate price to account for repairs or negotiate for the seller to complete repairs prior to the final sale.
Closing
Securing Your Sale
Appraisal
An appraisal is an estimate of the property value.
After clearing the title and resolving any inspection concerns, you will need to order an appraisal. Essentially, your mortgage lender needs to know the value of the property you are leveraging as collateral for your home loan. They will usually hire the appraiser and charge you for the service. An accurate appraisal is key to obtaining a mortgage and can affect your contract if it falls short of your offer.
Title
A “title” is the right to own, possess, use, control, and dispose of property.
Before closing and legally transferring ownership of the home, an attorney will generally conduct a title examination. This examination can identify any potential issues with the title (such as liens or defects) that would delay or prevent a successful sale. Once the title is “clear,” you’re ready to proceed.
Closing
You made it
Congratulations! If you’ve made it to the closing meeting, you’re at the finish line. Closing is the official transfer of property ownership, and usually involves a formal meeting with all parties. A closing officer will coordinate the necessary documents and payments. Take a look at our closing costs guide to see how fees are distributed. We want you to feel confident you know what to expect before signing on the bottom line.
Who Pays for What?
Buyer
Title & Attorney Fees
Including attorney, title insurance, wire and/or courier fees
Homeowner’s Insurance
The first year of your homeowner’s insurance is usually paid at closing
Lender Fees
Any fees from your lender to obtain your mortgage, including appraisal
Miscellaneous Costs
Such as inspection fees, prorated property taxes, or prorated HOA dues
You may ask the seller to pay for closing costs.
Seller
Transfer & Attorney Fees
Including transfer taxes, and attorney, wire and/or courier fees
Real Estate Commission
Commission fees are, on average, 6% of the sale price and are usually the seller’s responsibility
Outstanding Mortgage
Any balance left on a mortgage or any liens/judgments must be paid off at closing
Miscellaneous Costs
Such as negotiated repairs, prorated property taxes, or prorated HOA dues
Questions? Give us a call at 828-348-5720. We’d love to help you find your perfect home in Western North Carolina.