Often, as a real estate professional, I make assumptions about what my clients do and do not know, prior to the onset of a transaction. For any first time home buyer – or even a buyer who hasn’t done so before in NJ or in the past few years, can find the process to be a bit of a mystery. There are a number of tips that I feel are incredibly useful – to help your transaction move along just a bit more smoothly…
Contract details can be very important, and while I am sure your agent is very good, there are a couple of things to watch out for, as a rule of thumb:
1) Make sure that you have adequate time to obtain your mortgage commitment – 3 weeks is pushing it, and with any non-conventional loan, you may need 4-5 weeks at least – so make sure you have enough time to get your paperwork in and have the appraisal done by the bank.
2) Additional provisions in a contract can be useful, especially to protect buyers from difficulty. One way to ensure the ability to negotiate is adding an appraisal clause – so if the home does NOT appraise, there is a clearly outlined ability to cancel the contract if you choose not to continue with the transaction.
Inspections are a vital part of the home buying process:
1) An average home inspection for a single family home in NJ should take about 2.5 to 3.5 hours, including the termite and radon. Inspectors should take the time to speak to you about issues, as well as of offer tips for safety and maintenance. Oh, and anyone that is charging more than $600 (including radon and termite) is taking you for a ride. As a matter of fact, most inspections will cost less. Don’t be dazzled by price – it isn’t necessarily an indication of quality.
2) If you have a fireplace, you may want to consider bringing in a chimney inspector – you have to pay for it, but worth the money if there are expensive issues that can’t be easily seen.
3) Tank sweeps are vital – an unexpected underground oil storage tank is a potential liability. For any house with a live underground oil tank, make sure to test for particulates and that the owner has tank insurance.
Mortgages:
1) The first thing I always tell me clients is “SHOP AROUND!” The large banks are great, but individual mortgage brokers can have access to loan products that others don’t – and also have creative ideas on how to keep your costs down. The one question to ask the broker is “DO YOU ORIGINATE YOUR OWN LOANS, OR DO YOU SELL THEM THE DAY YOU CLOSE THEM?” This is important, because for any broker that sells immediately after closing, there can be a delay as they find a buyer for your loan.
2) Don’t lock your rate in to end on the proposed closing date for your home! On the off chance that there are unforeseen delays, try to hold off on your rate lock to anticipate potential issues – much easier than trying to scramble for a rate extension, or having to pay points last minute.
3) Make sure that you pay attention to your mortgage commitment expiration date – once again, no last minute scrambling.
Looking for the right attorney:
1) Do they call you back? They better call you back in a timely fashion.
2) Flat fees – really no more than $1200-1400 for a transaction.
3) Most importantly, are they a full time real estate attorney in NJ? Don’t pick a trial litigator that only does real estate on Fridays – you won’t get the customer service that you need for a smooth transaction. Trust me on this one!
So, just a few notes on things that might make your transaction a little easier – after, buying a home is stressful enough…
