Home Buyers Guide
At Simon Thomas Homes we know that you need to like the agent you are working with because the process to buy a home can take more than 30 days from meeting to view homes to negotiating a price, communicating daily, and closing on the deal. More important than enjoying the company and personality of your agent is being able to trust the agent you are working with. The agents at Simon Thomas Homes receive continual training to maintain the required sharpness and expertise to give you the advantage. There is a lot to know about buying a home and we are here to help. We will provide you with the best service you could possibly get from a real estate team, comfort in our conversations, and confidence in our ability, and the right amount of knowledge you might be seeking.
Eight Steps to Home Ownership
- Decide to buy.
- Hiring Simon Thomas Homes.
- Secure financing.
- Find your home.
- Make an offer.
- Perform due diligence.
- Protect your investment.
First, let’s address your fears and concerns.
- Fear: I should wait until the real estate market gets better.
- Fact: There is never a wrong time to buy the right home.
By asking questions about what is important to you now, we can find a home that fits the most important criteria you have. We can help you discover what it takes to reach your home ownership goals.
- Fear: I don’t have the money for the down payment.
- Fact: There are a variety of down payment options available to you.
The team at Simon Thomas Homes has worked with multiple lenders and can refer you to a trusted expert.
- Fear: I can’t afford to buy my dream home.
- Fact: The best way to get closer to buying your dream home is to buy your first home.
You’ve got to start somewhere. Start with us. Remember, it costs you nothing to have a good agent search for you. For whatever your home buying need is, we can and are happy to assist you.
Decide to Buy
Financial net worth comparison, according to the U.S. Federal Reserve Board of Consumer Finance:
- Average net worth of renters = $4,000
- Average net worth of home owners = $184,400
A home is the largest financial asset most people have due to equity and appreciation over time.
- Average annual appreciation rate nationally is 4 to 6 percent since 1977. (Note: Local appreciation rates vary greatly.)
- At 3% annual appreciation, a home purchased for $150,000 would grow to $364,000 in 30 years.
- Even at 1.5% annual appreciation, this same home would still grow from $150,000 to $234,462 in 30 years.
Buying your first home is an emotional decision—“Home is where the heart is.”
- A home represents your personal tastes and provides a haven of stability and security for both you and
your loved ones.
- Provides a pride of home ownership, because it’s yours.
It’s also a rational decision—“Home is where your wealth is.”
- Grow wealth via equity buildup, debt pay down, and value appreciation.
- In the United States, you can take advantage of tax-deductible benefits such as property and mortgage interest write-offs.
- “Home is where your wealth is.”
- A home is an “accidental” investment that creates leverage opportunities.
- In a few years, you can use your equity to trade up to a better home.
- Or, you might consider using some of your home equity to invest in a rental property or a second home.
Why pay rent when you can own?
- If you took out a 30-year fixed-rate mortgage for $150,000 and made monthly mortgage payments of $900…
- You’d pay $324,000 in mortgage and interest payments over the life of the loan.
- And after 30 years you’d own a home with an appreciated value potential of $364,000 (at 3% annual appreciation).
- Keep in mind: Appreciation rates vary greatly based on local conditions.
Compare that to paying $800 per month in rent over 30 years…
- Even if your landlord improbably never raised rent, you would still spend $288,000 and own nothing!
Hiring Simon Thomas Homes
- We will educate you about the market
- We will analyze your wants and needs
- We will Steer you to homes that fit your criteria
- We will coordinate the work of other needed professionals
- We will negotiate on your behalf BETTER THAN ANYONE ELSE
- We will review paperwork and deadlines
- We will solve any problems that may arise
Your advantages of a buyer’s representation agreement with Simon Thomas Homes:
- We will mutual expectations between you and us.
- We will to getting you into the home you want, while you commit to working exclusively with your us.
Sis steps to financing a home:
- Choose a loan officer (or mortgage specialist). We can help you find the right fit.
- Make a loan application and get preapproved.
- Determine what you want to pay and select a loan option.
- Submit to the lender an accepted purchase offer contract.
- We will assist in communicating with the mortgage specialist of your choice to obtain an
appraisal and title commitment.
- Obtain funding at closing.
Know Your Mortgage Options
Three basic factors:
- Down payment
- Interest rate
Understanding your monthly payment:
- Together, these four elements are commonly referred to as PITI.
Pre-qualification vs. pre-approval
- Pre-qualification is simply a rough estimate of how much you can borrow.
- Pre-approval involves a formal application process and provides you with a formal commitment from a lender stating how much you can borrow and at what rate.
Deciding among your mortgage options:
If you want…
- A low monthly payment – put more money down or purchase a more affordable home.
- A low down payment – secure a second mortgage or an “80-15-5” piggyback.
- To build equity quickly – make voluntary prepayments.
- To minimize risk – take a 30-year fixed-rate program with 20 percent down.
The suitcase principle
- Your lender decides what you can borrow, but you decide what you can afford.
- In your pre-approval letter, make sure the monthly payment is an amount you’re comfortable paying each month.
- It’s best to spend no more than a third of your gross monthly income on your home payment.
Find Your Home
Define your home criteria—analyze your values, needs, and wants.
We will consult with you to help you understand the rules of the market you are looking in.
When viewing a home, what you consider and what we consider are different.
You’ll want to look for…
Layout, space, a sense of value, convenience of location to work and schools, and features and amenities.
We consider what is important to you and also look for…
How the home compares in terms of size, layout, and value to other homes in the area, as well as maintenance and structural concerns.
Make an Offer
Three components of an offer that we will negotiate ferociously and fairly on your behalf:
- Price—offer must reflect true market value of the home.
- Terms—six basic categories address timing and financial considerations.
- Contingencies—often referred to as “conditions” that allow you to opt out of a deal if the home has a problem.
- What’s a fair price?
- Perform Due Diligence
- Property inspection—exposes any structural or hidden issues.
- Home owner’s insurance policy—protects against loss or damage.
Perform Due Diligence
In your inspection, it’s the big stuff that really matters.
- Cracks or crumbling in the foundation
- Cracks inside the house over windows
- Water stains in ceilings, floors, or walls
- Faded or worn shingles
- Mold issues
Pre-closing responsibilities include:
- Appraisal, survey, title search, and title insurance.
- Keeping yourself mortgage worthy!
- Doing a final walk-through of home.
Countdown to closing includes:
- Getting your settlement statement, certified funds, evidence of insurance, and transfer of clear title.
Protect Your Investment
Two keys to good home habits:
- Keep it clean. Perform routine maintenance on your home’s systems, depending on their age and style.
- Keep an eye on it. Watch for signs of leaks, damage, and wear. Fixing small problems early can save you big money later.
Tip: Keep a file of receipts for your repairs.
Breathe a sigh of relief and enjoy with whoever you chose to celebrate with! We will keep in touch with you to see how life in your new home is going. We will remain here for you to address any newly discovered issues that arise and provide you with resources to refer to you for home projects you and remodeling you envisioned. What might be surprising to people that have used other real estate agents in the past is that we always become friends with the people we have worked with. Once you work with us, you enter into a relationship that willingly lasts forever.