Home Buying Tips

The decision to move is a personal one. Here are some questions you should ask before you put your current home on the market.

• Are you financially ready to move? Do you have enough cash for closing costs, a down payment on the new property, and any other expenses related to the new home purchase? Or, will you be relying on profits from the sale of your current home to cover these costs? Keep in mind that many sellers are leery of accepting offers that are contingent on the sale of the buyer’s home.
• Are you emotionally ready to move? Do you need a larger home to accommodate your family or lifestyle? Are you still attached to your present home emotionally, or are you ready to leave it behind for better things?
• Do you feel pressured to move now? Your timetable will influence the manner in which you buy.
• How long do you expect to own your new home? Since closing costs can be expensive – sometimes up to 8% of the home’s value for both buyer and seller – you may want to keep your new property for as long as possible before selling it, so that appreciation will cover the closing costs you’ll face when selling.

If you’re comfortable with your answers to all the above questions, you’re ready to move on to the preliminary stages of house hunting.

When you’re ready to buy a new home, it’s important to have a professional, reputable real estate agent on your side. A good real estate agent will work side by side with you through every step of the home buying process. They will have access to a great number of homes through the Multiple Listing Service (MLS), as well as an insider’s knowledge of the housing market and fair market values. Your real estate agent will assist you with all the paperwork requisite to the home purchase, and put you in touch with area professionals like mortgage brokers, insurance agents, contractors, and home inspectors.

As a buyer, you will never have to pay a real estate agent’s commission; a buyer’s agent is paid by the seller at closing. If your Real estate agent asks you to pay a fee to represent you as a buyer, they’re not a professional real estate agent!

We of the Cindy Jasper HummerHomes Team have been helping buyers realize their dreams of home ownership for more than 28 years. Call us at (615) 300-4695 to find out what we can do to help you buy your dream home. Or, email us for more information at [email protected].

The process of house hunting is not always easy. But if you go about it in an organized, methodical fashion, the experience will be a lot less stressful. Before you so much as glance at the Nashville MLS, ask yourself these questions:

• Where do you want to live? Make a list of communities you like. If school systems are a consideration, research schools in each community. Consider your commuting times from each neighborhood. Review retail centers, entertainment venues, and other amenities that are important to you and your family.
• What do you need from your home? Make a list of features that are absolutely necessary in your new home: the number of bedrooms and bathrooms you need, the amount of storage space you require, and the minimum lot size you can live with. If you have a particular attraction to (or dislike of) certain architectural styles, you can make note of it here. Remember, though, that the items on this list are necessary features: you can add amenities like granite countertops and hardwood floors to an existing property, but it’s a lot harder to add an extra bedroom.
• What is your price range? It’s important to establish this right from the start. You shouldn’t necessarily go by what you’re pre-approved for, because it may represent more than you can comfortably afford. Base your price range on what your total monthly payments, including taxes and insurance, will be.
• What are your mortgage options? With all the recent turmoil in the sub-prime mortgage market, it’s more important than ever for buyers to make sure that they know what they’re getting into when it comes to their mortgage. It’s not a good idea to choose a risky adjustable rate mortgage just so you can get a bigger loan. If you have the option, choose the lowest-risk mortgage you can qualify for, usually a fixed-rate loan. Ask your Nashville mortgage specialist about your options, and always get pre-qualified before you start shopping.

When you have your parameters firmly established, it’s easier to search for your perfect home. Thorough planning and concrete guidelines help ensure that you don’t get excited over a home that isn’t right for you, or one that’s located in a neighborhood you’re not comfortable in.

Once you’ve narrowed your field of vision, it’s time to research the markets you’ve chosen as possible locations for your new home. Your real estate agent can help you review sales activity in your chosen areas and help you determine what areas will offer the most properties in your price range. Hot spots will demonstrate higher sale prices, even in cold markets. Remember that current market conditions will have an impact on how you shop, and what’s available to buy. Also, remember that primary selling seasons are spring and fall: you may find better deals if you shop off-season.

Your house-hunting experience will be a successful and rewarding one, as long as you stay focused on the criteria you laid out in Step 3. That said, you’ll want to look at as many properties as possible as you can to maximize your chances of finding that perfect home.

Here are two possible ways you can locate your perfect home:

• Through your agent. Your real estate agent will generate a list of properties that fit the criteria you’ve provided, and can arrange for showings around your schedule.
• Through your own efforts: While your real estate agent will have access to most of the properties for sale in your chosen areas through the MLS, for sale by owner properties and private sales may not be listed. Check local newspapers and real estate publications for listings. If there are areas you especially like, spend a few hours driving around: a suitable home is almost guaranteed to catch your eye. If you find a match, call your agent with the address and ask them to arrange a showing.

Especially in a fast-growing area like Nashville, you’ll find more options than just established single-family homes. Here are some other options you can explore.

• New construction homes: Homes in new communities offer many benefits. Take a look, even if the yard is still a pile of dirt. The earlier you get in to a hot new area, the more your new home is likely to appreciate.
• Pre-construction properties: Even more than new construction properties, pre-construction properties can potentially offer great value. But your timeline has to be flexible, because everything from permitting to weather conditions can cause delays in construction.
• Vacant Land: If you’re having trouble finding your dream home, consider building from the ground up! Custom construction can often be a viable and economically feasible option, especially if you’re not on a strict time schedule. Ask your real estate agent about home sites available in your area.
• Multi-family homes: If you have the time and energy to devote to being a landlord, purchasing a multi-family home may help you build a better financial future. But this approach demands careful consideration, especially if there are existing tenants and/or problems with the building. Above all, make sure that you can afford the mortgage in the event that one or more of your units are temporarily vacant.

Once you’ve found a suitable property, you’ll schedule a showing. Here are some tips.

• Bring your lists: it’s easy to forget your must-have’s when wandering around a beautiful home. With your list at hand, you’ll be less likely to start “reasoning away” your need for that extra bedroom.
• Ask Questions: Don’t be afraid to ask questions during the showing. The seller’s agent should be able to tell you whatever you want to know.
• Measure: Will your current furniture work in this home, or will you have to buy new pieces? Don’t be afraid to bring a tape measure with you to a showing, especially if you have oversized furnishings.
• Dig Deep: Don’t hesitate to ask to view the basement, because that’s where you’ll see the most evidence of structural problems. Also, check out the attic, the garage, and any sheds or storage structures on the property.
• Come back for more: If you like a property but are still unsure, you don’t have to put in an offer right away. Schedule a second showing in a week or two, and give yourself some time to think about the property.

And above all, don’t buy if you’re not sure!

When you’re ready to make an offer on a home, there are a number of things you should consider.

• Market Conditions: In a weak market, a lower offer may be more readily accepted, especially if the seller is in a hurry. In a stronger market, however, offers should be considered very carefully to ensure that they aren’t rejected out of hand. Above all, beware of “overheated markets.” Don’t be pressured into a bidding war, or you may end up paying far more than you intended for your property. Also, hot markets are often succeeded by very cold ones, and owners often find themselves saddled with a home that’s worth a lot less than they paid for it. If you’re on the fence, it’s best to hold back.
• Property Specifics: No home is perfect. But if the home you want to bid on suffers from any problems beyond normal wear and tear – ancient décor, damaged carpets or flooring, lack of curb appeal – you should take these issues into consideration when deciding what to offer. Structural repairs or necessary remodeling expenses should be deducted from the total offer (or their completion prior to sale should be negotiated with the buyer). Also, keep in mind that many new construction properties are sold at a flat price by developers, and that the price of the home may not be open to negotiation, unless the market is particularly sluggish.
• Your real estate agent’s opinion: Your real estate agent has a thorough knowledge of the Nashville real estate market, and will work with you to make sure that your offer is reasonable based on current market conditions.
• Seller’s motivation: A seller eager to dispose of the property will be much more amenable to lower offers and a quick closing. A seller who isn’t in a rush, however, may be willing to hold out for a higher offer – or even another buyer, if you don’t prove flexible enough.
• Your motivation: How badly do you want this home? Are you willing to take the chance that the seller will decline your offer, and risk having to search for another suitable property? If you’re sure this is your dream home, you may consider being a little more flexible with your offer, in order to ensure that you can secure the property.

Finally, you’re ready to write your offer. The offer can be made via a formal business letter or by a purchase contract. Your agent will likely prefer to use a purchase contract. Either way, make sure that you provide all required information, and that you are crystal clear on the terms of the offer. If you’re received a pre-qualification from your mortgage broker, include a copy of the pre-qualification letter with the offer, so that the seller knows you’re prepared for the final sale.

If your offer is not accepted outright, the seller may come back with a counter-offer. To continue the negotiation process, you will have to submit another offer. The amount of the counter-offer will give you a rough idea of how low in price the seller is willing to go. The second offer, and the counter-offers, may be done verbally, with your buyer’s agent acting as your liaison to the seller’s agent: the purchase contract can be formally revised once both parties come to an agreement on the final purchase price.

When you and the seller have come to an agreement on the sale price, it's time to finalize the purchase contract. The purchase contract is a document that specifically details the terms of the property sale and the obligations of both buyer and seller in relation to that sale. Here are some tips to help you make sure that your contract is comprehensive, clear, and problem-free.

• Get everything in writing. Especially when it comes to repairs, remodeling, or other contract contingencies, entering into purely verbal agreements can be a big mistake. If you do come to a verbal agreement with the seller, put the agreement into the contract as soon as possible.
• Have the contract reviewed by a reputable real estate attorney. An attorney can ensure that the contract is worded clearly and correctly, and that it contains no loopholes that might cause problems down the line. Make sure that you have at least 3-5 business days in which to have your contract reviewed. Although many states dictate a mandatory review period, the review period should also be guaranteed in writing. Above all, never sign anything you haven't read.
• Choose your escrow company or closing attorney. Depending on the area and your personal preferences, you may choose to have an escrow company or an attorney oversee the closing on your new property. If you choose an attorney, make sure that they are well versed in local and state real estate law. If you choose an escrow company, make sure that they are reputable.
• Learn about titles and deeds. A deed is the document that transfers ownership of a property. The best person to answer your questions is your escrow company or closing attorney.
• Learn about your deposit obligations. The amount of your deposit, as well as its due date, will be listed in your purchase contract. Make sure that you know how much money you are required to deposit on what dates, and follow through, or you risk negating the contract and may face legal repercussions. Typically a small amount is required as a deposit against the balance upon the signing of the contract, with the remainder of the down payment due within 1-3 weeks.

The first step is to shop for a mortgage lender. Before you sign on with one lender or broker, make sure to review the types of loan packages they offer to be sure that you're getting the right mortgage. If you have credit issues, look for a lender or mortgage broker who specializes in loans for high-risk or credit-impaired clients.

If you've already secured a pre-approval, you're halfway there. If you have not, make sure to have all of your paperwork ready when you sit down with your mortgage broker. You will need tax returns, proof of income and assets, and any other paperwork pertinent to your ability to pay back the loan in a timely and responsible manner. Also, remember to watch interest rates; when you're pre-qualified, you may be able to lock in a great rate for a specified period of time.

When you've found the property you want to purchase, you'll be ready to begin securing your mortgage. If you've already been pre-qualified, the mortgage approval is contingent only on the proven status of the home you want to buy. Be sure to get a copy of the purchase contract, as well as an applicable inspection reports, assessor's reports, and other pertinent paperwork to your lender or broker as soon as possible to expedite the approval process.

When you're preparing to close on your new home, it's important to stay organized to avoid any mistakes, delays, or unnecessary stress. Here is a list of everything that needs to be done before you close on your home. Most of these items will be done on your behalf by the HummerHomes team:

• Create a Closing File. Keep all paperwork, reports, and information related to your purchase and closing in a single file, to avoid misplacing important documents.
• Create a schedule. If you have any contractual obligations that you are required to fulfill prior to closing, make sure that you complete them in a timely manner, and document their completion. Add that documentation to your closing file. (The HummerHomes team will make sure that everything is done within the scheduled times).

• Schedule inspections. Before you close, you will need to have a general home inspection performed for your own protection. Try to be considerate of the seller's schedule when booking inspections. Depending on your age, health, location, and other factors, you may wish to have additional inspections performed, such as tests for lead paint, radon, molds, and other contaminants. (The HummerHomes team will be responsible for scheduling all inspections).

• Schedule a Survey. Surveys should be conducted at least 2 weeks prior to closing. (The HummerHomes team will be responsible for scheduling a survey if you would like one).

• Schedule the appraisal. Although your lender will probably schedule and hire the appraiser, you should take steps to ensure that the appraisal is completed in a timely fashion to avoid delays at closing. (The HummerHomes team will make sure that the appraisal is scheduled).

• Inspection contingencies and repairs. You have a right to know if the seller has adhered to the terms of the contract. If necessary, schedule a second visit by the home inspector to ensure that all repairs are completed according to the contract. (The HummerHomes team will be responsible for scheduling reinspection if desired).

• Finalize your home loan: After the property is appraised, your lender should provide you with a mortgage commitment. If you don't have that commitment in hand within a reasonable time after the appraisal takes place (1-2 weeks), contact your mortgage lender. (The HummerHomes team is in constant contact with the lender and will make sure that the lender provides up to the date information).

• Secure your closing costs: If you have to cash out investments to cover closing costs, do so before closing. All funds will have to be wired. Check with your attorney or escrow company to verify the exact amount due at closing. (The HummerHomes team will assist as your liaison with the closing attorney).

• Secure your homeowner's insurance. You will need proof of insurance to complete the closing proceedings. Your insurance agent will give you a binder when you purchase your policy.

• Secure your title insurance. In order to secure the insurance, the title company will need to perform a search on the property to ensure that there will be no issues with the title transfer. Since you will also need this insurance to complete the closing, it's best to start the purchase process at least a few weeks prior to the closing date to make sure there's time to deal with any problems that arise. (The HummerHomes team is in constant contact with the closing attorney and will notify you if there is a problem with the title).

• Schedule a walk-through. This should take place a day or two before closing (as provided in the purchase and sale agreement), so you can assure yourself that the seller has complied with all contingencies and is ready to move out on schedule. (The HummerHomes team will be responsible for scheduling the walk through).

• Check on your closing statement: Contact your attorney or escrow company a few days before the scheduled closing date to ensure that all is proceeding smoothly. Your attorney or escrow agent should complete all closing statements and other documents in advance. (The HummerHomes team will be reviewing the closing statement with you several days in advance of the closing).

• Review all closing documents: Make sure that you understand the closing statement (HUD-1) and all other pertinent documents by reviewing them with your attorney or on your own in advance. (The HummerHomes team will be with you to assist).

• On the day of closing: Bring your driver’s license, the closing attorney will need to make a copy for the file. You should also bring your checkbook as well, since small filing fees or other expenses may pop up during the course of the closing.
  
  Often, small issues come up at closing which can stall the proceedings. In most cases, these can be negotiated right then and there with no delay. If problems do arise, remain calm; there is most likely a simple solution.
  
  After the closing is complete, collect the keys to your new home from the seller, as well as any warranties, service records, instructions, or other items which pertain to the home or items sold with the home.
  
  Congratulations! You just purchased a new home!

Once you've closed on your new home, you'll be ready to move in (unless you have a prior agreement with the seller). Here are some tips to help you transition smoothly into your new home.

• Be ready for the movers. Make sure that you have your funds ready: you'll need payment for the moving service (if you didn't pay in advance) as well as cash tips for the movers (about $20 per mover is standard, although that varies with the length and duration of the job). Be ready with instructions about fragile or expensive items, or pack special items yourself and transport them in your car. Make sure the movers have room to park the truck or van in the most accessible location. If you're moving on your own, be sure to book your truck in advance, and have boxes, crates, tape, ropes and bungee cords, and other supplies on hand.
• Do a final walk-through. Especially if you're selling the home you're vacating, you don't want to leave anything behind.
• Switch your utilities. Call all utility companies at least 3 days in advance of your move to switch your services, since they may require a technician to come to your old residence and check the meters.
• Notify the post office of your move. This can be done online through USPS or at your local post office. Arrange to have your mail forwarded.
• Finish your paperwork. Store your closing file in a safe and secure location. Fill out any more applicable paperwork such as school registrations for children, voter registrations, and Department of Motor Vehicles address changes. Contact any creditors with whom you have open accounts to change your mailing address. Lastly, check to make sure your deed has been filed with the appropriate authorities.
• Deal with any problems. If you discover problems with the property after you've moved in, have them inspected by a professional, get a report, and consult your attorney. The seller may be liable for undisclosed defects in the property.
• Change the locks. It's not something most people think of when they move, but it's an important precaution. Chances are that your home's previous owner did not collect all their spare keys from friends, neighbors, babysitters, service people, etc. Your spare keys should be in the hands of people you personally know and trust.