Buying a house? Here are the top 4 things you need to know!
Let’s get right to it – you are buying your first house, or maybe this is your second but you haven’t been in the real estate market for awhile – without scaring you too much, the process can be complicated! We strive to reduce the stress and help our clients get the best house for their budget by focusing on four key areas:
- Your Budget: Establishing a budget for your house purchase means you need to work with a good lender to determine the true cost of homeownership. Looking at your assets, liabilities, tax rebates and the most important part – YOUR COMFORT LEVEL with the TOTAL payment. PITI is an acronym for Principle, Interest, Taxes and Insurance. These are the minimum costs you will pay each month to own a home. Add in the cost of the gardener, pool maintenance, home repair and make sure you feel good about your budget.
- Your Lender: This is a BIG part of any real estate transaction. Most people don’t understand that, they think once they are pre-qualified and get an accepted offer the lender is supposed to be at the ready to press the red button to send the money. That is not the case. Lenders can be as much as 50% responsible for how your escrow and closing goes. There will be constant requests for updated documents throughout the process and new discovery as another underwriter reviews your file before funding so be prepared. As we discussed earlier, lenders help you determine your purchase price. Lenders very often give clients a number that is way out of their comfort level. By lenders standards you can afford that payment – but you want to save and have a life too. I make sure my preferred lender gives us a ‘cheat sheet’ for payments as we look at a range of homes. We might walk into one and find the perfect fit, but we need to know if we buy that one – what our payment will be before we write an offer. When the scariest part of your house is your mailbox (that monthly payment envelope), that isn’t a good situation. Make sure you work with a good lender who is hands on at all times.
- Your Agent: A famous line from one of the Indiana Jones movies was from the scene in the cave where Indiana Jones selected the challis to drink from as a challenge – there were so many beautiful ones that were bejeweled and looked like a challis of a king. But Indiana was smart and he chose the one for that job and wasn’t swayed by the beautiful ones. My point here is you need to chose an Agent that knows your market. Look for someone who has done 10 deals at least for the past year, who works in and around the city you are interested in. Go to one of their open houses and see if they are working – talk to them face to face and see how you communicate. It is so important to make sure you have someone that really understands you and your family. They need to be your trusted advisor in this process.
- What Works For You: You need to communicate to your agent how you live – for example, if you cook or entertain a lot, a small kitchen is probably not going to be satisfactory. If you really want a media room where you can have a theatre surround system to watch movies – you need to have space for that. It is totally possible to get what you want but you must be able to articulate your desires. This brings us back to selecting an agent – you need someone who can help you work through what you really need and want in your home.
As a specialist in the real estate market I have experience in the San Fernando Valley area. My clients want and need my expertise far beyond the closing of escrow. Make sure you ask for references and check out online reviews. They can give you a good picture of how you will fit as you work together with your agent. It’s the worst when you don’t have a good relationship – Give me a call!