According to a 2020 National Association of Realtors (NAR) report, homeowners in the U.S.
stay in their homes for an average of 13 years. In Connecticut, the average is one to two years longer. One home purchase every decade and a half makes buying a home a seemingly brand-new experience every time. Thankfully, while it can prove challenging, it's not overly complicated, especially after familiarizing yourself with Lisa DeFonce's home buying guide.
Organize your finances
A common error for home buyers out of the market is underestimating the costs of purchasing a home. It's understandable, considering that after a few years of living in your current residence, you grow accustomed to the consistency of your mortgage, insurance, and taxes. You also can anticipate when repairs might be needed and how to maintain your to lessen costly unforeseen expenses.
Steps you'll need to take to get the process going include:
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Verify your credit: Excellent credit secures the best mortgage rates from lenders, and the better the terms, the less your new home will cost over the life of the loan. If you need to improve your credit score, take the time before securing a loan. It could save you thousands of dollars.
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Solidify your savings: One of the most overlooked aspects of a home purchase is the need for extra cash. More than monies needed for a down payment (see below), additional funds post-sale provide a cushion for unforeseen expenses.
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Know the costs involved: There are two sets of expenses to every home purchase—pre-closing and post-closing. The better you can anticipate each set of numbers, the less stressful your overall transaction.
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Pre-closing costs:
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Down payment: There's flexibility in how much upfront cash you want to contribute to your purchase. However, anything less than the industry standard 20% down payment and you risk the added cost of private mortgage insurance in the first years of your loan.
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Appraisal fees: Establish the property's value and whether the transaction can move forward or requires adjusting.
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Inspection fees: The cost for a complete evaluation of a property's condition.
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Closing costs: A catchall term that includes, but is not limited to, the following fees dues at signing: a reimbursement for prepaid taxes, tax escrow, attorney's fee, pro-rated adjustments or apportionments, and insurance costs such as departmental searches, endorsements, title insurance, and recording fee.
Upon closing, the ongoing costs of owning kick in and become your primary concern moving forward. These include:
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Post-closing costs:
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Mortgage Payment
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Insurance
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Property taxes
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PMI (if applicable)
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HOA dues (if applicable)
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Utilities: electricity or gas, water, sewer, and trash
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Internet or cable
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Property upkeep, including landscaping, pest control, seasonal HVAC
The larger or more valuable the home you purchase, or the more desirable the neighborhood, the higher all of the above expenses will be. Be mindful of that aspect as you search for a home.
Seek pre-approval
Once you're confident with your finances, you're ready to secure loan pre-approval. Effectively securing your financing for any home you choose to make an offer on, pre-approval provides considerable flexibility by:
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Confirming the price of the home you can afford.
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Allowing you to make competitive home offers.
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Accelerating the buying process.
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Establishing your creditworthiness and financial ability to purchase a home.
Securing pre-approval requires the following:
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W-2 form and federal tax returns for the past two years.
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Pay stubs from the most recent two pay periods to confirm your ability to pay the monthly mortgage.
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At least two months' worth of financial statements to verify funds to close on the loan.
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Credit report to ensure creditworthiness and qualify you for specific loan programs.
Pre-approval also makes your offers far more attractive to sellers. In most cases, and in the absence of guaranteed all-cash offers, a competitive, pre-approved offer will trump those without.
In securing pre-approval, shop around for favorable rates. Seek guidance and referrals from your real estate professional for viable, well-respected lenders. An experienced lender, in tune with your specific needs as a buyer, can save you considerable money with the right loan.
Understand your wants and needs in a new home
Before starting a home search, or engaging with a real estate agent, identify what you hope to get out of your new home and what factors matter most to you. Several points to consider as you determine your ideal home, neighborhood, and buying situation include:
- Will your home require a set number of bedrooms and bathrooms or a minimum threshold for square footage?
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As discussed, your preferred purchase price or any premiums you're willing (or unwilling) to entertain to secure the home you want.
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Its proximity to certain amenities, such as major employment, retail centers, or within a certain school district.
Even if you cannot define some or all of the above items, a general idea of what matters most in your home search will give your real estate agent a starting point for homes and locations that could fulfill your wishlist. As your search evolves, you'll soon enough figure out the elements most critical to your happiness in a home and what you can live without.
Engage with a Realtor
Whether you reach out to a Realtor, broker, or individual buyer's agent, a real estate professional is a vital resource in helping you navigate the Greenwich luxury real estate market.
Especially helpful for those who are either first-time buyers or venturing out into the market for the first time in a long time, a great agent simplifies the process of finding and acquiring a home.
In addition to their primary objective of helping identify homes that fit your lifestyle and budget, a seasoned real estate professional provides guidance on the following:
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Pros and cons of your preferred neighborhoods, and if a community or its immediate and larger market area is trending up, down, or is a good place for a long-term commitment.
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Home pricing, and if the property's value is in line with its asking price, location, age, and features and amenities.
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Area demographic trends, where major employment centers are located, the top commercial or retail centers, and which schools are the most sought after in a given area.
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Relocation assistance, from helping with temporary housing needs to acclimating to a new community.
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Provide referrals for those teams and individuals who will assist in completing your home purchase, including attorneys, home inspectors, mortgage consultants, and title services.
The best Greenwich real estate professionals are your champion throughout the entire process. They guide you through finding a property and serve as an advocate once you enter the offer, negotiation, and closing stages of your transaction.
Don't shy away from asking plenty of questions when identifying the best agent for your needs and then engaging with them throughout the homebuying process.
Make an offer
Upon finding a home you deem worthy of an offer, it's time to put together one that is both competitive and comfortable. Expect a counteroffer and some level of negotiations.
Also, be aware that another buyer can make a higher bid before your offer is accepted.
Should the seller accept, the next step is performing a property inspection. A few critical points to keep in mind:
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Never turn down the opportunity for a licensed home inspector to inspect a property you intend on buying. A professional inspection can reveal any potential issues or necessary repairs, after which you can negotiate to have them addressed, the purchase price discounted, or walk away entirely.
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Always ensure you are available to be at the inspection.
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Be aware of a property's age, location, and disclosures made available such as lead paint, property condition, FEMA flood zones, or Megan's Law.
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Discuss with your real estate agent and inspector beforehand the need to perform an engineering and septic system inspection, and confirm smoke detectors and pool enclosures are up to code. During the inspection, ensure testing for asbestos, carbon monoxide, lead paint, mold, pests and termites, and radon.
The faster the inspection is completed to your satisfaction and the seller agrees to the final terms, the sooner you can get the home under contract.
Finalize your purchase
Once all parties are on the same page and under contract, the closing process begins. Though delays can occur, particularly for complex deals, most closings transpire without delay.
Highlights of the process include:
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Before closing, you'll select a title company and review the preliminary closing statement for closing costs and confirm the necessary documents needed at the closing. These typically include:
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Certified check
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Homeowners insurance policy with proof of payment
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Checkbook for closing costs
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Photo ID—driver's license or passport—for all borrowers
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Your real estate attorney will schedule the closing date, time, and location with the seller's and lender's attorney.
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A final "walk-through" of the home should be conducted to verify the condition, all inspection repairs are complete, and that no further alterations have been made to the property.
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At the closing, the respective parties meet—you, your attorney, your real estate agent, the seller's attorney and selling agent, the lender's attorney, and the title closer—and review documents and agree on the calculation of adjustments.
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Property payoffs, adjustments, and open taxes are resolved, documents are signed, the property is transferred, and the title is cleared.
Once complete, congratulations are in order as you receive the keys to your new home.
Post-closing, the county clerk receives the deed and executed document to record the transaction, and you receive a final closing statement.
Partnering with a trusted real estate can streamline the process and ensure it is both enjoyable and stress-free, especially when handling properties in a highly sought-after area like Greenwich. If you're ready to start your home-buying journey and explore luxury homes for sale in Greenwich, contact
Lisa DeFonce today.
