Buying a home, what is involved?
Buying A Home
Buying a home can be a scary, but exciting adventure. If you’re a first time buyer, it can be daunting. If you’ve purchased homes in the past, recent changes have made the process a lot more complicated.
But we can get you through the process, just like we’ve helped many other people like you.
We strongly recommend that you get a good real estate attorney. If you need a referral, we can recommend a few good ones. You will also need a settlement agent, or a title company. We can also recommend loan officers, home inspectors, painters and handymen / contractors.
Who Will Actually Do the Work to Close the Purchase?
There are a lot of people involved in the process.
If you need a mortgage to purchase a home, like many of us do, you’ll work with a loan officer to finalize the terms of your loan. And you’ll have an attorney iron out the details of the contract and aid in any negotiations regarding inspection issues. But the settlement agent, or title company, is the one who actually handles the transfer of the property being sold. They take care of transferring the title of the property from the seller to the buyer. And there are other important tasks that must be completed before and after closing to ensure everything goes smoothly.
Here are some of the services that a settlement agent provides.
A title company will ensure that there are no title issues and that as a result the seller holds title to the property being sold free and clear of any liens or encumbrances. This is the title insurance.
They make sure the property’s title is securely transferred from the seller to the buyer.
The settlement agency will prepare and verify all necessary lender and closing documents.
They will provide all parties involved in the transaction with a settlement statement, which is commonly known as the HUD.
They notify the relevant government authorities about the change of ownership after the closing is complete.
And they are responsible to quickly and securely disburse funds and proceeds to the appropriate parties after the closing.
What does the home inspector do?
An important part of the home buying process is the home inspection. There are actually two inspections that occur.
One is the Certificate of Occupancy inspection. All towns inspect according to different criteria. Some towns do a very complete inspection, others do a minimal inspections which only checks for working smoke detectors, carbon monoxide detectors and the proper type of fire extinguisher. The seller is responsible for the CO inspection.
But you, as the buyer, want a very thorough inspection. We strongly recommend that you hire a professional inspector. Don’t let your cousin or uncle be the inspector. As a matter of fact, home inspectors must be licensed in the State of New Jersey. If you do not use a licensed inspector, you have shaky legal ground to demand necessary repairs from the seller that are found during the inspection.
What does the home inspector inspect?
A professional inspector will inspect the exterior of the building, including the roof and foundation. Inside, the inspector will ensure all windows and doors open, remain open and close. Your home inspector will check the electrical panel, in addition to all electrical receptacles. The inspector will also check all plumbing, as well as the HVAC and hot water heating systems.A wood destroying insect report will also be necessary. Remember – there are two types of homes in New Jersey, homes that already have termites and homes that will have termites. When the inspection is complete, you will receive a report noting all deficiencies found. You will then discuss with your attorney which items you wish the seller to address, and your attorney will forward your requests to the sellers attorney.
Who will help us through this complicated process?
When buying a home, your best friend can be an experienced Realtor. A good Realtor can recommend qualified professionals to perform the tasks listed above. In addition, your Realtor can tell you what you need to do, in addition to when to do it.
An experienced Realtor will help you find the proper home for you. And in addition will do the research to help you decide what the value of the home should be. Next is where the Realtor shows their true value, which is in preparing an offer and negotiating the offer into a contract.
So find yourself a good Realtor. Hey – I’ve got a great idea. You should be aware that we have sold more than 400 homes to date, We have a bit of experience in helping people get into their perfect home.You’re already on our web site, so hire us – Bunny and Art Reiman,
Call us 732-616-6226.
Sorry to tell you the bad news, but you’ll need some more cash in order to complete the purchase. And what you’ll need is the closing costs. Some of the expenses you’ll probably face are as follows:
Home Inspection – typically $300 – $700. The costs depends on the the inspector and how much the inspector charges for his / her time. The size of the home is also a factor. A wood destroying insect inspection needs to be performed. If you test for lead paint or radon it will also affect the cost.
Legal Fees – typically $900 – $1400. Speak with the attorney beforehand so that you know.
Recording Fees – to file the legal documents with the town / county records
Title Insurance and Search – Approximately $5.00 per thousand of the purchase price. For example, a house purchased for $400,000 will be +- $2000.
Property Survey – $500 – $800
Bank Fees – This will be the application fee, appraisal, credit report and more. Speak with your loan office as these costs vary between financial institutions.
Real Estate Taxes and Mortgage Interest – Your lending institution will probably require an escrow of 2 – 3 months taxes. Further, mortgage interest from the closing date until the end of the month needs to be paid.
The bank will require that a one year homeowners insurance policy be purchased prior to closing. The cost is dependent upon the size of the home and property. Speak with an insurance agent, but probably at least $1000 per year, but could be considerably higher.