Terms to Know When Purchasing a Home

Homeownership is something many dream of and many are about to start the process of making it a reality. For most it is a 15 or 30 year commitment so ensure you have as much information as possible before signing on the dotted line. Over the last several weeks se covered several terms to know when purchasing a home in the It’$ My Money Squad. This gives you a sneak peek into terms we covered when preparing to buy a house.  I also hope you love the graphic as much as I do as it consists of the terms in the shape of a house. 

Choosing a Real Estate Agent:
A good real estate agent is a critical  in the home buying process. 
Real estate agents can provide:

• Details on home that match you desired list 
• Information about the neighborhoods 
• Their knowledge of the home buying process

Best of all, as the buyer, it doesn’t cost you anything to use an agent. They get paid a commission paid by the seller of the house. There is a difference between Real Estate Agents and Real Estate Brokers. 

Tips:

• Trust your gut. If something doesn’t feel right, then it probably is not right. 
• Ask questions, like how long have they been an agent? Which areas are they most familiar with?
• Ask how many houses have they sold on the last 12 months. Good ones sell a minimum of 1 a month. 
• Ask for the MLS production record
• Google their name to see what comes up 
• Only look at houses in your budget.

If an agent consistently shows you hours outside of your budget be concerned. That said, an agent may show you ONE house outside of your budget by way of comparison or to do a reality check but that is it.

Searching for a home:
When searching for a home create a list for must haves or show stoppers. Also, include "would like to haves" and a space for comments. Ensure you share the list with your real estate agent AND bring a copy of the list with you each to each home visit. Literally check the items on your list while you are there. When you try to do it afterwards, you forget and it is hard or compare. 

Pre-qualified vs pre-approved:
A couple others steps in the home buying process is pre-qualified and pre-approved. These terms are often used interchangeably but are different.

Here is a quick definition for each. 

• Pre-Qualified requires less information which include, but limited to, income, assets, debt. It gives you an idea what type of mortgage you would probably get approved for. Nice to have but not required. 
• Pre-Approved is very similar to the prequalified but requires more documentation, the information is verified and a hard credit check is done. You can go to this step without doing the one above. 

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Be sure YOU can afford the house and the other things you enjoy doing regardless of the amount shown on either.

Asking prices:
The asking price is the amount the seller is “asking” for the property you are interested in buying. Often times buyers want to know “should we offer the asking price” or “will they accept a lower price”. Well the depends. 
How long the house as been on the market? What price have other houses recently sold for in the area?

Your real estate agent can help with that appropriate asking price.

• Be sure to look at houses within your budget
• Have your budget defined before going out
• Know your deal breakers

First time buyer grants available (links shared me for informational purposes):
Philadelphia, PA giving away $10,000
https://phdcphila.org/residents/homebuyers-and-renters/philly-first-home/
Baltimore, MD giving away $5,000
https://dhcd.baltimorecity.gov/hho/homeownership-incentives
New Haven, CT giving away $10,000
https://www.newhavenct.gov/gov/depts/lci/homebuyers/closing_assistance.htm
Fairfield, CT giving away $30,000
https://www.fairfieldct.org/content/10726/11008/13302/18250.aspx
Hamden, CT giving away $5,000
http://hamden-ct.com/Content/Down_Payment_Assistance.asp
Hartford, CT gives away $40,000
http://www.hartford.gov/dds-housing/232-development-services/2282-ho-househartford
Carbondale, Illinois gives away $3,000
https://www.explorecarbondale.com/179/City-Funded-Housing-Programs
Washington, DC gives away $4,000 or Maximum gap financing of $80,000
https://dhcd.dc.gov/service/home-purchase-assistance-program-hpap
Washington, DC teacher next door $4,170
https://www.teachernextdoor.us/Washington-DC
New Jersey gives away $10,000
https://www.nj.gov/dca/hmfa/homeownership/buyers/dpa/index.shtml
North Carolina gives away 3% - 5% down payment assistance
https://ncfhaexpert.com/fha/first-time-home-buyer-grants-in-nc-explained/

This gives a sense of how we are educating in the It'$ My Money Squad.  We also have Squad members that facilitated free helpful sessions sharing their expertise such as home owners insurance and staying out of foreclosure.