Brian S. Cantor, Attorney-At-Law’s: Beginning the Odyssey to Purchase a Home
The first time home buyer provides a real estate attorney with an exciting challenge.
Assisting someone to achieve the American dream of owning their own home is a very rewarding experience.
Nothing brings me greater pleasure than to wish someone good luck in their new home.
However, getting there can be a frustrating experience. Too many people treat buying a house particularly their first home, as if they were buying a car on impulse.
Most likely you are presently renting where you live. Assuming you are a renter, how do you get out of your lease? A month to month tenancy or lease allows you to pay rent only up to the end of the month so that your “wasted rent” is kept to a minimum. A one or more year lease usually will hold you responsible for the time you stop paying or vacate till the time the landlord is able to re-rent the apartment. You may also be responsible for the cost of advertising the apartment. In a residential lease the landlord has the duty to mitigate damages, that does not necessarily mean that they can. If the landlord is able to find a new tenant at a lower rent you will be responsible or the difference over the balance of the lease.
Therefore, timing is everything. You will want to start looking at an interval that allows you to find and purchase a home within your time frame. Perhaps the best answer is to let your landlord know where you stand and work with them. However, get all agreements in writing. If you are at the end of your lease you may want to go month to month.
Next, you will need to know how you will pay for the new home. Most people will need a mortgage. Generally, you will need to put down ten to twenty percent as a down payment or equity in the house plus pay closing costs. Closing costs are generally bank “junk charges” such as document preparation, flood certification, overnight mail as well as appraisal and application fees. The junk charges are additional fees that the bank charges to make money or keep their expenses down.
You may be asked to pay up front interest from the date of closing to the end of the month.
You may also be asked to escrow for real estate taxes sufficient to pay the next tax installment, which is usually due 2-4 times per year depending on the town. You will be asked to pay the homeowners insurance for one year in advance.
I, as your attorney, will charge a fee as well as a bank attorney if the lender requires separate representation. A title search will be required, and a one time up front title insurance premium. The recording fees charged by the town clerk are minimal. A municipal search is also suggested to check for violations and open building permits, among other concerns.
You should interview lenders to make sure you qualify for a loan in the amount you are seeking and select the product that suits your needs. It is important to select a lender that will be accessible and respond to you timely.
Before buying any property you should always have a building inspection by a building inspector with good credentials and a good reputation. A good building inspector can find if there are any problems with the home. Your realtor can help you negotiate with the seller to make the repairs or lower the sales price or give you a credit for the repairs.
Sometimes a building inspector will find issues with a home that might make you think twice whether the purchase of that home might be in your best interest or whether you might be better off looking for another property.
A consultation with an accountant to determine your budget is helpful too.