Home Purchasing Process Part 2: Now That You Have Found Your Home

Now that you have found your home, what are the steps to get you to home ownership?

The process begins with an offer. In the Greater New Haven region of CT, we place offers using contracts and once signed, they are binding. For this reason, it is very important to be prepared with the right information. Also, taking a close look at the contract will give you an idea of the steps that are coming up. To place an offer, you will need to know:

1. The amount you are willing to pay for the property

2. The time you will need to get your inspections completed

3. The amount of earnest money you will provide

4. What personal property is included in the sale

5. When you want to close and take possession of the property

6. If you are financing:

   1. How much of the property you will be financing

   2. What type of loan you will apply for and the terms of that loan

   3. How much time it will take to process your loan

Let’s take a look at the first two.

What you are willing to pay for a property is up to you. I provide you with a market analysis, so you know the current value of the property in this market, but if you will need to make changes to the property to make it feel like home, that may change its value to you. For instance, if the current home has a newer, Earth toned kitchen, but you like white cabinets and a black counter, your investing in a new kitchen will not change the value of the home. The value of the home in its current condition is less for you than it would be to someone who likes Earth tones. Obviously the seller is looking for the person who values the home highest, as it is, but if he cannot find that person, he may consider a lower offer from you. In this current market, there are so many buyers out there and the home prices are increasing, so likely you will want to choose a home you like as it stands.

The next thing to consider is inspections. I will help you choose which inspections are necessary, based on the age and location of the property. Most buyers opt for a general home inspection using a licensed home inspector. This inspector covers the structure, systems, wood destroying insects, small animal infestations, Radon and can usually see signs of issues with lead paint and other hazardous materials. If the inspector flags any issues, sometimes it is helpful to bring in a specialist to provide more information. If the property has a well and/or a septic system, these are separate inspections, often done on a different day from your home inspection.

It is very important that you are available to attend the inspections. The inspector will not only flag issues, but will also show you how to use your new home - where the water main and gas shut offs are, how to place filters in the furnace and he may locate drains that need to be kept from debris to function properly. In addition, he can give you an idea of the severity of any issues. Some will be a hundred dollar fix and others could cost thousands. Sometimes it is hard to differentiate between the two if you are just reading the report after the fact. While the home inspection period is usually about 10 days after the contract is signed, that can often be negotiated if you are going to be away.

If your friends or family members do not know a good inspector, I can provide you with several reputable ones. There are cheap inspectors out there, but this is not a time when you want to cut corners. The State of CT is a “buyer beware” state and expects the buyer to do their own due diligence on the condition of the property they are buying. The only thing more disappointing than having to get out of a purchase because of the condition of the property is buying the property and THEN finding out the condition.

Another thought on inspections: if you are not purchasing a new home, you should not expect the home to be in new condition. The price should already reflect the age and condition of the home. The inspection should uncover any defects that you might not see not being a contractor yourself and also compare the home to a typical property in your purchase’s age range. Question your inspector about differences between your home and those being built currently, so you know what you are buying. You may find things you like even better about older homes!

If you do not like what your inspector finds during inspection, you have the opportunity to void the contract and get your deposit returned in full. You may also choose to make requests of the seller to fix items or to renegotiate the price of the home. The seller is under no obligation to do either of these things, however, if you found issues, the next buyer is likely to find them, too. Often the seller is willing to work with you so you feel comfortable moving forward with the purchase.

So now you know about the value of the property, how you choose a purchasing price and about inspections. Next post will be about personal property, financing and the closing process.