Edwin St. Aubin's Blog
Contingencies on a contract to buy a home are there to protect both the buyer and the seller. The contingencies give the buyer the right to back out of the contract if any of these contingencies aren’t met. There are many reasons that buyers back out of deals including financial issues and problems with the home. Below, you’ll find a break down of some of the most common contingencies and what they mean for you as a buyer or a seller.
Most home contracts come with what’s called a financing contingency. This gives you the ability to walk away from a deal if the financing falls through when trying to buy a home. Usually this is due to a credit reason or some other financial reason. You can’t rely on financial cracks to help you to back out of a deal on a home. Lenders will only deny a loan for real financial reasons. There’s no way to ask a lender to lie for you so you can get out of buying a home! This is why you need to make your decision about a home purchase wisely.
This gives the buyer the right to have an inspection on the home within a certain time frame which is usually 5-7 days. If something is really off with the inspection that you as a buyer don’t feel comfortable with, you have the right to back out of a deal without repercussions. While seller disclosures are important, the seller can’t disclose what they don’t know about. That’s why the home inspection is so important. The seller’s disclosure cannot protect you from hidden damages that may cost half of a home’s worth to repair.
If homes are selling fast and you want some secure way to back out of a deal you should consider an appraisal contingency. If the home you want to purchase doesn’t appraise at a price high enough to meet your mortgage requirements, you have a legal way to back out of the deal. For example, if you put down 20 percent of the purchase price of a home and the home doesn't appraise for the value of that purchase price, you’d need to come up with the remainder of the money in cash. An appraisal contingency protects you from having to face this. You’ll still need to have a home inspection done on the home to search for any problems, but an appraisal contingency protects you from any problems with financing and your own disposable amount of cash that could arise due to a home appraising low.
While contingencies aren’t necessary as a homebuyer, they’re highly recommended. Without contingencies, you could be left with a number of expenses such as damages that are extremely costly to fix.
After you buy a house, it may be only a few weeks before your closing date arrives. At this point, you and the home seller will finalize your transaction. And if everything goes according to plan, you'll own a new home.
Getting to closing day, however, sometimes can be difficult. Lucky for you, we're here to help ensure you can enjoy a quick, seamless home closing.
Now, let's take a look at three steps to close on a home.
1. Complete Your Mortgage Application
A mortgage is a must-have for a homebuyer to close on a residence. Fortunately, it often can be simple to obtain a mortgage that matches or exceeds your expectations.
Consult with several local banks and credit unions. By doing so, you can learn about all of your mortgage options and select a mortgage that corresponds to your finances.
After you complete a mortgage application, a bank or credit union can provide you with mortgage options. Then, you can make an informed decision about which mortgage suits you perfectly.
2. Perform a Home Inspection and Appraisal
A home inspection is paramount, as this assessment will enable you to identify any underlying home problems and address them before closing day arrives.
During a home inspection, a property expert will assess your residence both inside and out. This expert also will provide an inspection report that details his or her findings.
Review the results of a home inspection report closely – you'll be glad you did. If you assess a home inspection report, you can review a home inspector's findings and determine whether you still want to purchase a house.
If you accept the inspection results and decide to move forward with a home purchase, an appraisal may follow.
Like a home inspection, an appraisal requires a property expert to visit your home. This expert will evaluate your home's interior and exterior, as well as comparable houses in your city or town. Following a home appraisal, you will receive a property valuation.
Oftentimes, a property valuation may match or exceed the price that you intend to pay for a house. If it does not, there may be instances in which you can still walk away from a home sale or ask the seller to lower a house's asking price.
3. Buy Home Insurance
Home insurance safeguards your residence and personal belongings against loss, damage or destruction. As such, it is essential to purchase home insurance before you close on a house. Because with home insurance in place, you'll be good to go to protect your house and personal belongings against myriad disasters.
The closing process can be long and complicated. But if you work with a real estate agent, you can receive plenty of support leading up to closing day. In fact, this housing market professional is happy to provide tips to ensure you can streamline the closing process.
Get ready for closing day – follow the aforementioned steps, and you can speed up the process of acquiring your dream house.
Saving for a down payment on a house can seem like an insurmountable challenge to first-time homebuyers. You don’t have the benefit of equity built from owning previous homes, and most, if not all, of your income could be tied up in other places like paying rent and bills.
If this sounds like you, don’t worry--you’re not alone. The good news is that there are some other things you might try before giving up on saving for a down payment.
In today’s post, we’re going to discuss a few techniques for saving for a down payment that you might not yet have thought of, and talk about how to can start saving sooner rather than later.
1. Know your options
Many first-time buyers aren’t aware of all of the different mortgage types that may be available to them. VA loans, USDA loans, and more are all available to buyers who don’t have a large down payment saved up.
There’s also the common myth that your down payment needs to be at least 20% percent of the cost of the home. However, this number is more like an ideal figure that will allow you to avoid paying private mortgage insurance (PMI).
Before determining how much you need to save, make sure you understand all of your options.
2. Learn the art of budgeting
Most of us use the term “budget” as a vague word that means the amount of money we can spend.
The true point of a budget, however, is to gain a detailed understanding of where your money goes and to develop a plan.
One good method of budgeting is to do what budget experts call, “giving every dollar a job.” This means that you know where each dollar o your paycheck will go.
There are many tools available for you to use when budgeting. You can use a free app like a spreadsheet from Google Sheets, or a service that connects you your bank account like Mint. Mint will also let you set goals (such as saving for a down payment) so you can track your progress.
3. Asking for a raise
Depending on how long you’ve been at your job and your work performance, it might be time to ask your employer for a raise up front. Many employers are more than happy to reward hard work and dedication, but just don’t hand out money if they aren’t asked.
4. Start that side hustle
There are a lot of ways to earn extra money in a service economy. From waiting tables at night to delivering packages for Amazon, and giving lifts in your car for Uber, there are numerous ways to earn some extra cash in the evenings.
Just remember that you want this project to be something that’s enjoyable or interesting, otherwise it’s easy to burn out from overwork.
5. See if you have employee assistance options
Some employers offer housing assistance programs to their employees as a work benefit. If you haven’t flipped through your HR packet in a while, now might be a good time to make sure you’re taking advantage of your options.
No one should be forced to break the bank to secure a terrific house. However, a first-time homebuyer may be more likely than others to overspend on a residence, particularly if he or she fails to understand the ins and outs of the housing market.
Lucky for you, we're here to teach you what it takes to browse the real estate market effectively so you can find a house that matches your budget.
Now, let's take a look at three tips to help a first-time homebuyer purchase an affordable residence.
1. Examine the Housing Market Closely
Many great houses are available, and a first-time homebuyer should review a broad range of residences closely. By doing so, this homebuyer can establish a price range for his or her home search.
Evaluate the prices of residences that are currently available in your city or town. That way, you can find out what it costs to afford a home that may serve you well both now and in the future.
Also, assess the prices of recently sold residences in your area. With this housing market data in hand, you can find out whether you're about to enter a buyer's market or seller's market and plan accordingly.
2. Get Pre-Approved for a Mortgage
Pre-approval for a mortgage can help you map out a homebuying budget before you enter the real estate market. Thus, getting pre-approved for a mortgage can make a world of difference for any first-time homebuyer, at any time.
To get pre-approved for a mortgage, you'll want to meet with several banks and credit unions in your area. These lenders can teach you about different mortgage options and help you select one that corresponds with your budget.
In addition, be sure to ask plenty of questions about potential mortgage options before you make your final mortgage decision. This will allow you to understand the differences between fixed- and adjustable-rate mortgages and choose a mortgage that can help you avoid the temptation to overspend on a residence.
3. Collaborate with a Real Estate Agent
When it comes to pursuing a house for the first time, don't leave anything to chance. Instead, collaborate with a real estate agent, and you can streamline the process of purchasing an affordable residence.
A real estate agent helps take the guesswork out of looking for residences. He or she will keep you up to date about new houses as they become available and set up home showings on your behalf. Plus, this housing market professional will do whatever it takes to guarantee you can obtain an affordable house that surpasses your expectations.
Perhaps best of all, a real estate agent will help you alleviate stress throughout the homebuying journey. And if you encounter challenging negotiations with a home seller, a real estate agent will step in and help you get the best price for a residence – without exception.
Ready to purchase a house for the first time? Use these tips, and you can acquire an affordable residence that you can enjoy for years to come.
Buying a condo may seem like an uphill climb, particularly for those who are browsing the real estate market for the first time. Lucky for you, we're here to help you take the guesswork out of finding the right condo.
What does it take to locate a high-quality condo at an affordable price? Here are three tips that every first-time condo buyer needs to know.
1. Explore a Wide Range of Condos
The real estate market is filled with many first-rate condos, and the sheer volume of properties that are available may feel overwhelming at times. Therefore, you should allocate the necessary time and resources to find a condo that suits you perfectly.
Don't be afraid to check out several condos over the course of a few days or weeks. By doing so, you can better understand what you'd like to find in the ideal condo.
Of course, if you fall in love with a condo, you should be ready to submit an offer. That way, you can avoid the risk of missing out on a great condo that matches or exceeds your expectations.
2. Determine How You'll Pay for a Condo
Many property buyers get pre-approved for a mortgage, and for good reason. With a mortgage in hand, you'll know exactly what you can afford as you review the real estate market.
Meet with a variety of banks and credit unions. These lenders will be able to provide you with multiple mortgage options and respond to your financing concerns and queries.
Also, keep in mind that the price of a condo may extend beyond your monthly mortgage payments.
In many instances, condo communities have homeowners' associations (HOAs) in place that will charge monthly fees. Learn about any HOA fees in advance, and you'll know exactly what you'll need to pay each month to live in a particular condo community.
3. Work with a Real Estate Agent
No one should be forced to evaluate condos on their own. Fortunately, you can hire a real estate agent to streamline the process of finding a terrific condo.
A real estate agent with condo experience understands the hurdles that may arise during a condo search. As such, he or she will do whatever it takes to ensure you can get the best results possible as you look for the perfect condo.
For instance, a real estate agent will set up condo showings and keep you up to date about open houses. This real estate professional will even negotiate with a condo seller on your behalf, which means you won't have to worry about breaking your budget to purchase a stellar condo.
Employing a real estate agent enables you to get expert advice at each stage of the condo buying process too. Thus, you can receive instant responses to your condo buying questions at any time.
Simplify the process of buying your first condo – use the aforementioned tips, and you can boost your chances of acquiring a superb condo at a budget-friendly price.