Tips on Buying a House in Rochester, NY
You’ve decided that you’d like to buy your first house or purchase a new one. Where do you start?
Credit
Well, the first thing you need to do is find out how your credit is and how much you can get pre-qualified for. There is no point in looking at houses above your price range. This will only lead to disappointment when you have to start looking for a home that you can afford.
The most important thing these days is your credit score. I can’t stress enough how important this score is for many things in life. From a mortgage loan, to a car loan, employers, or a landlord check before renting, your ability to be trusted is tied to this number. It is very important to pay your bills on time. It’s even more important not to be late on an existing mortgage payment. A lender may turn you down if you have been late or missed payments on your current mortgage. The interest rate you will receive is based on this credit score. The higher your number, the better rate you will receive.
You can get a free credit report online, and check for problems before starting your home search. A good site to use is www.annualcreditreport.com
You can get a free credit report once every 12 months. Some sites charge a small fee if you want your FICO score along with the credit report. FICO stands for the corporation that developed it: Fair Isaac Corporation.
Typically lenders will throw out the top and bottom score and keep the middle score. Make sure you are receiving a genuine FICO score or NewGen score. Each credit bureau has a different name for its FICO score. Equifax is Beacon. Experian is Experian / Fair Isaac Risk Model and TransUnion is Empirica. Everything else is an imposter.
The FICO score your lender gets and the FICO score you can order yourself will most likely be two different scores, so don't expect the score you receive to match. FICO scores range from 300, which is very bad, to 850, which is the very best.
You may have heard someone say they have a score of 930, and you thought that was impossible because 850 is the highest score you can get. They were being honest. They are referring to a Vantagescore, not a FICO score.
A competitor to FICO is VantageScore, which is a different way to compute credit qualifications. This scoring model assigns a letter grade, from A to F, and was created by the three credit bureaus. Lenders are only using FICO scores as of this writing, but here is how it breaks down as scores are grouped and then rated:
· A: 901 - 990
· B: 801 - 900
· C: 701 - 800
· D: 601 - 700
· F: 501 – 600
Pre-Approval Process
There are four main things to keep in mind before, and during the home buying process. 1. Don’t make any large purchases until after your closing day. If you must purchase something, do it with cash. 2. Don’t switch jobs. 3. Don’t move money around in accounts. 4. Don’t cancel any credit cards.
Lender
You now know what’s important, and what to avoid. If you want to go straight to the source you’ll need, you can just call a mortgage lender and have them pull your credit, and tell you your score. If you need help finding the right lender I can offer recommendations of lenders who have done phenomenal jobs for my clients in the past. A good lender can counsel and guide you to the most advantageous and appropriate program for your needs.
Down Payment & Closing Costs
The days of no money down loans are over. It’s best to save as much as possible on your own before buying a home. You will need money for a down payment and closing costs. Your mortgage consultant will give you a good idea on what these costs will be. If you don’t have the funds required for closing costs, it is possible to ask the seller to agree to give you a credit towards them at closing. This is called sellers concessions. A mortgage consultant can pre-qualify you or pre-approve you for a loan. A pre-approval is best. This is when your income and assets are verified. The reason this is important is it gives you more buying power. A seller will want to know if you can get a loan. Therefore it is always best to have a pre approval letter included with your offer.
Earnest Money Deposit
You will also need to write a check for an earnest money deposit. If the offer is accepted the check will be deposited within 24 hours. It will be held in an escrow account. This deposit will be applied towards your down payment.
Inspections
You will also need funds for inspections. Inspections are typically done within 7 days of an accepted offer. There are a few different types of inspections you can have done. You do not have to have any done if you don’t want to. The main ones are an engineer’s inspection, a pest inspection, mold inspection, and a radon inspection. Septic and well inspections are usually done by the seller if the property contains them. I suggest getting an engineer’s inspection done because it’s a good way to get a professional opinion on the condition of the home. You will receive a report when it is over. An inspector also gives useful advice on maintaining the property in the future.
Mortgage Application
If your offer is accepted you will need to apply for a mortgage right away. You will need to pay an application fee, and for an appraisal to be done on the property. We offer a discount on this to our clients.
Attorney
In New York closings are done by attorneys, so you will need one. It is best to have an attorney that specializes in real estate transactions. You can use whatever attorney you’d like. If you don’t have one, I can recommend attorneys who give discounts through our Hunt Realty Club. Your attorney will review the contract with you. A contract does not move forward without attorney approval.
Home Owners Insurance
The week before closing, you will need to purchase home owners insurance on the property. It’s important to protect your investment. The lender will most likely require you to pay one year in advance.
A Buyer’s Agent
Now you have a good idea what is involved in the process. You will need a Realtor on your side that only works for you. The listing agent works for the seller. You need a Realtor to represent you, and your interests. You don’t have to pay for a buyer’s agent. A buyer’s agent is free to you, and protects your interests. A buyer’s agent fee comes out of the proceeds at closing.
My job as your buyer’s agent is to help, and support you to make the best decision for your family. You will never feel pressure to buy a certain property. Buying a house is a very important decision, and I want you to be happy with that decision. I will be there for you for months if that is what it takes. I’m always on time, and I give quick responses to calls, emails, and texts. I also give nice closing gifts. All I ask for is loyalty in return. It's best to spend time with one Realtor and let them get to know you, and what you like, or don't like.
The Search
Once you have been pre-approved we can talk further about what features and criteria are most important to you in your new home. Is a short commute to work important to you? Good schools? We will identify what are “must-haves” and what are “would like to have, but are not deal breakers.” Once we have determined what you are looking for I will email you properties that fit your search criteria as they hit the market.
I realize you can look for homes on your own on the internet. The problem with that is sometimes the information is outdated. I have had people call me on homes that had sold the week before. Even after agents change them to pending in the MLS, some sites do not update quickly. As a Realtor, I pay dues to be a member of the MLS (multiple listing service) this gives me access to more information than the average consumer. I know about a new listing before the general public. I can find out if it really did just come on the market, or if it was listed with another agent for the past few months. I can also find out how much the home down the street actually sold for, not what a neighbor said. This is important information to know. I can set up your own web page that is updated nightly so you only see up to date information.
Drive By and Appointments
If you see a property that you are interested in, take a drive by it. Do you like the street, the neighboring houses, and the yard? If you do, then call me. I make it a point to try to answer my phone at all times. If I’m with a client, or in a meeting I will call back right away.
As you find homes that interest you I will arrange for us to view them in person. Before I meet with you I will go over the property condition disclosure and let you know if there are any problems. As your agent I will point out to you issues that you should consider when making your decision, especially features that could affect your resale positively or negatively down the road. It is easy to get caught up in the beauty of a property but you need to know the good and the bad so that you can make an informed decision.
The Offer
If you find a home you really like, I will find comparable properties that sold recently, and show or email them to you so you can make an informed decision. I will let you know if I think the home is overpriced.
Once an offer is accepted it will take time to get to closing. It could take a good six weeks to close. It’s important during this time that you try to be patient and understand that many people are working behind the scenes on your behalf. I will stay in touch with you on a regular basis during this time.
I have already mentioned various things in the beginning of this post so you are prepared ahead of time. There are other things that are done, but the main ones are here.
Final Walk Through
A day or two before closing we will take a final walk through of the property. You will need to call your utility companies and have them turn things on in your name. We will check to make sure everything is in working order.
Closing Day
This is usually done at the attorney’s office. The paralegal will let you know what you need to bring. Your attorney will be there to help you. You will have many papers to sign. You will receive your keys to your new home on your closing day.
Then it’s time to move in and make the house a home. This is also a good time to celebrate, and look forward to the many happy memories you will have.
If you or anyone you know, has questions or needs help with real estate, feel free to contact me via email, text, or phone call.
Kristal Perrone
2008 Agent of the Year
