The home buying process explained
Tribune Content Agency Q: Ihavebeen renting for about two years and am interested in buying the home I currently live in. The landlord is willing to sell. What do I do next? A:
If you and your landlord have agreed on the terms of the sale, your next step will be to hire a real estate attorney if you live in a state where real estate attorneys generally help buyers and sellers in residential real estate transactions, or a closing attorney or settlement agent to help you out.
You’ll need to complete a real estate purchase and sale form. This document sets forth the business terms that you and your landlord have agreed to when it comes to the sale of the home. Furthermore, even if you’ve lived in the home for two years, you still might want a professional home inspector to go through the home with you. It’s one thing to know the dishwasher and disposal are working but it’s another thing to understand how old the roof and mechanical systems are, what problems there might have been in the past and whether the foundation has any issues.
As with any real estate home purchase, you want to make sure that you know what you’re buying.
We also recommend that you talk to a mortgage lender or mortgage broker before you sign the contract to make sure your finances and credit history are in order. Buying a home is expensive, so we also want you to understand how much it will cost you to buy the home. All this information and more will help you even before you sign on the dotted line.
Here’s something that often gets forgotten when buying directly from an owner: an owner’s title insurance policy. While your lender will require you to pay for lender’s title insurance, you should make sure you also buy and receive an owner’s title insurance policy for your purchase to protect your investment in the home (like your down payment). In some states, the seller is responsible for the payment of the owner’s title insurance policy, but in others, you will have to pay the owner’s and lender’s title insurance policies. They’re worth it!
Depending on to whom you talk, we’d like you to understand what it will cost you to own the home, what your monthly expenses will be and what you might anticipate in home repair expenses down the line. Between your attorney, the lender and your home inspector, you should have a better idea on these numbers. You may even get a financial benefit on your federal income tax returns if you can deduct the mortgage interest payments and real estate taxes while you own the home – but only if you are able to itemize your deductions on your federal income tax return.
We also hope you’ve done your homework on understanding the value of the home you are buying. We’ve seen plenty of people think they are getting a good deal when they do things on their own only to find out that the market for real estate is actually way off from what they thought. If you do your homework, you’ll be ahead of the game. And your home purchase should work out just fine. Good luck.
Ilyce Glink is the creator of an 18-part webinar and ebook series called “The Intentional Investor: How to be wildly successful in real estate,” as well as the author of many books on real estate. She also offers information on her YouTube channel. (youtube.com/user/ExpertRealEstateTips).
Contact Ilyce and Sam through her website, ThinkGlink.com.
© 2016 Ilyce R. Glink and Samuel J. Tamkin. Distributed by Tribune Content Agency, LLC.