Read This Before You Buy a Home!

So you’re thinking you might want to buy a home? I’d say You’ve come to the right place! I’m going to briefly go over my brand new eBook “how to buy a home in 2021” Where I cover everything from reasons to own a home and vocabulary, to how to’s, worksheets and checklists!

So without further ado let’s jump right into it! 

Let me start off by introducing myself for those of you that don’t know who I am. My name is Andrew McManamon, I’m a Realtor with signature Sotheby’s international realty. But before I became a realtor, I started my career as a manager of an independent and assisted living facility where my priority was to put smiles on over 250 residents. After 5 years, I moved to their corporate office where I was in charge of the activity calendars of 10+ locations. After 3 months, I felt like something was missing, a void that I didn’t know how to fill. I was missing out on what truly gives my life purpose, and that is helping people. I remembered a conversation I had with one of the residents who just happened to be a retired realtor, who told me my personality was a perfect fit for that career choice. I took the course, passed the exam and over 3 years later here I am! Not only do I help people, I help people with the biggest financial decision most people will have in their lifetime. 

First off, I wanted to congratulate you on getting ready for the next chapter of your life. It can be a very emotional and stressful process, and that’s exactly why I wanted to create this “one-stop-shop” video and eBook to help you throughout the entire thing! If you have any questions throughout the video, please don’t hesitate to reach out anytime! I’d love to answer any questions you may have. 

REASONS TO OWN A HOME

For starters, why should you own a home? 7 reasons! Tax benefits, appreciation, equity, savings, predictability, freedom, and stability. The U.S tax code let’s you deduct interest paid, property taxes and some of the initial costs when purchasing a home. Home sale prices have increased an average 5.2% from 1972 to 2014 according to the national association of realtors. For renters out there, the money being paid is money you won’t ever see again. Mortgage payments let you build equity ownership in your home. The other reasons touch on predictable payments, freedom to express your creativity in your home with a few DIY projects! And stability allows you to build long-term relationships with your neighbors within the community.   

HOMEBUYING PROCESS

The million dollar question every first time home buyer asks is, what’s the process of buying a home? Well, I’m glad you asked! To put simply, it starts off with getting pre-approved for a mortgage so you can understand exactly how much you can afford. Meeting with a real estate professional to show you homes. Then you decide what home is most ideal for you and your lifestyle. Put in an offer on the home, get an inspection to uncover the home’s flaws that will allow for any terms to be negotiated along the way. If the home inspection is satisfactory, the home will get appraised to determine it’s true value and how much the mortgage lender is willing to give you to finance the home. If the home is valued less than it is listed, the seller will come down on the price or you’ll have to come up with the funds to pay the difference. Then preparation for closing continues, the title is searched, financing is organized, and all parties work together to get a clear to close! After everything is completed, a closing date is set and you begin the next chapter of your life!

HOW DO YOU PREPARE TO BUY A HOME? 

Great question, here’s 6 quick tips for you! Talk to mortgage brokers and get more than one quote, be ready to move (especially in this market), make a good offer, Think ahead at your 5-10-15 year plans to see if the home you’re thinking on makes sense! Develop a home/neighborhood wish list and select the areas in which you want to live!

HOW DO YOU PREPARE TO FINANCE A HOME?

It starts with developing a budget! If you have no idea where to begin, I have include a free gift for you in the description of this video! It is a home budget template to help you stay organized! Reduce your debt in any way you can, increase your income, get another job, ask for a raise, whatever you can do to get some more money! I shouldn’t say whatever, you know what i mean…. Save for a down payment! YOU DON’T NEED TO PUT 20% DOWN, there are loan programs that are 3% down. The industry average is 7% down, so shoot for that! Keep your job, establish a good credit history, keep saving, and seek down payment assistance from state and local governments!  There are special down payment assistance programs that will help you fund your first home!

HOW DO YOU PREPARE FOR HOUSE HUNTING

Understand that the best time to buy a home is always 5 years ago! All jokes aside, if you find the perfect home now, don’t risk losing it trying to analyze when the market and interest rates will be the best. Accept that no home is perfect, if it’s in your ideal location and doesn’t require more work than you’ve intended for it, act on it. You will second guess your decisions, the process will be scary, but believe me when I say those feelings happen with everyone! Buy a home because you love it, then think about how it appreciates! Not the other way around!

HOME HUNTING QUESTIONS TO ASK YOURSELF

Buying a home shouldn’t be a daunting task. It should be fun! Bu\t understand that buying a home isn’t short term. Breakdown your life goals in 5,10,15 year increments! And ask yourself the following four questions: Are you wanting to build a family? Do you want your home to be a close commute to work? Friends? Or Family? Do you need additional space or storage for hobbies and collections? What types of amenities would you like to have nearby?

These four questions will keep you on track when trying to find a home to fit your wants and needs. 

QUESTIONS TO ASK AND RESEARCH YOURSELF ABOUT A NEIGHBORHOOD

Is it close to your favorite spots and destinations? Is it safe? Is it economically stable? Is it a good investment? Do You like what you see? What’s the school district like? These questions definitely give you a lot of homework to research! A great place to start is by going to Niche.com to compare areas of interest based on the previously asked questions. Please keep in mind that real estate professionals can only answer so much about a few of these topics, as they are bound to a code of ethics to not discriminate. 

HOME INSPECTIONS WHAT TO KNOW

What do home inspectors look at in a home? The structure, exterior, roofing, plumbing, electrical, heating and air conditioning, interiors, ventilation/insulation, and fireplaces. They compile all their findings in a lengthy report that you can refer back to at any point! This report is insurance, it gives negotiation power during the inspection contingency to lower the price to cover any immediate costs, and it also is a grocery list you can hold onto for when you decide to sell the home! You can refer back to it and fix a few items to take away some negotiation power in the future. 

APPRAISAL PROCESS WHAT TO KNOW

Once you are under contract, your lender will send out an appraiser to make sure the sale price is in line with the property’s true value. Appraisals guide mortgage terms, but understand that it isn’t a concrete number and can differ quite a bit depending on who does them. The appraisers value can be challenged by a comparative market analysis done by a real estate agent if they don’t believe the value is correct. 

WHAT TO AVOID BEFORE CLOSING

Don’t purchase a big ticket item such as a car, boat, or expensive furniture pieces. Don’t quit your job, Don’t open or close any lines of credit, don’t miss paying your bills on time, don’t spend the money you were saving for closing costs and down payment, and do not ignore calls from your mortgage representative. Do yourself a favor and wait until after you close on your home before you make a large purchase. 

YOUR FINAL WAlKTHROUGH

Before closing you have the option to walk through the home one last time before you sign your name calling it yours! As much as we’d like to give people the benefit of the doubt. Some people’s intentions aren’t always the purest. On this final walkthrough, check the following places: basement, attic, every bedroom, bathroom, closet and crawl space. Make sure any requested repairs are done satisfactory and still holding up. Make sure no unexpected changes have been made to the property since last viewed. Make sure all appliances are performing as disclosed, hot water heater is working, heating and air conditioning are working properly, garage door opens and remotes have been left, instruction books and warranties are accessible, and all debris and personal items from the sellers have been removed. 

UPDATE YOUR ADDRESS

Something a lot of people don’t think of right away and that’s updating your address! Update your address on all public information, utility servicers, memberships and subscriptions and personal and business services

NEW HOME DUTIES FOR a NEW HOME OWNER

Be sure to save and store your closing documents in a safe spot, change all the exterior locks because you never know who had a key to the home! Deep clean and paint the home before you organize and plan for placement, take a look at your homeowner’s insurance policy to be aware of what your coverage is, give attention to your heating and cooling systems, and give your budget some attention.

Andrew, I bought the house already. Why do I need to revisit my budget? 

I’m glad you asked, it’s very easy to blow the remaining of your life savings on cool things for you home, but keep in mind that you need to pay for property taxes, HOA (if applicable), and insurance. On top of that, I would recommend having 6+ months of emergency funds just in case something uncontrollable occurs. 

Well this has been a mouthful. I appreciate everyone who stuck around until the end, and for that, I want to give you a free copy of my eBook! Hit the link HERE to download my eBook on how to buy a home in 2021. It’s chalked full of information that I only scraped the surface on in this blog! If you have any questions about it, please don’t hesitate to reach out.

Cheers,

Andrew McManamon

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