It can be a difficult decision, but it’s one that has to be made at some point in your life. Renting a home has benefits of its own. For example, if you don’t like your location, you can easily move to another one once your lease has ended. There are also drawbacks to renting that lead many people to buy their own home. When you rent, you are paying to live in a space that will never be yours. Let’s consider the aspects of home buying versus renting a home.

 

The true cost of home buying, is more than the down payment and mortgage. There’s also private mortgage insurance (if your down payment was less than 20% of the home price), homeowner’s insurance, property taxes, and maintenance. These costs can increase your monthly payment by 40%.

 

In home buying, each payment you make on your mortgage brings you one step closer to home ownership. As you pay on your mortgage, you increase the equity you have in your home. This equity can be prove to be beneficial if you want to sell your home or use it to borrow money.

 

It’s a pretty well-known fact that mortgage interest payments and some property taxes are tax deductible. For many, this is a very good reason for home buying. Not only are you investing your money in a valuable asset, you get a break from the federal government for doing so.

 

When home buying, home and property maintenance is your responsibility. You will either have to maintain the home yourself or pay someone to do it. In either case, it is an additional concern that you must take into account.

 

Financially speaking, maintenance is not very much a concern. It is the landlord’s responsibility to fix the plumbing if something breaks down. 

 

Moving is easier when you rent. Of course, this depends on the amount of belongings you have, but generally speaking, people who rent tend to have less “stuff” than people who own.

 

Extra fees are usually non-existent. While some landlords require tenants to have renter’s insurance, the premiums are much lower than homeowner’s insurance. When you rent, all you have to worry about is the rent and utilities.

 

You could rent a home for thirty years and, at the end of that time, not have accumulated any equity in the property. When, if you had bought rather than rented, in thirty years, you would have a pretty sizable asset.

 

Rent increases are inevitable. You can expect to continue to pay higher rent each year. The only thing you can do about a rent increase is move to a property that has a lower rent.

 

 

One of the most confusing things about a home buying is what you are supposed to do and when. It can be difficult to pinpoint an exact timeframe for home buying since it can vary depending on the market. Generally, you can expect it to take about 3 to 4 months to find a home. This timeline is based on that time frame.

 

Come up with a checklist of things tasks to be completed in the home buying process. This checklist should include all the steps you need to take from educating yourself about the real estate transaction to shopping for the home to the closing. The checklist will serve as your guide throughout the home buying process.

 

Get pre-approved for a mortgage. This will give you a price range to work with throughout the home buying process. Make sure that you are getting pre-approved and not pre-qualified.

 

Start shopping for a real estate agent to assist your home buying. Use references from family and friends to find a reputable real estate agent that will have your best home buying interests at heart.

 

Begin the search for your home. Come up with a list of things you need and want from a home. Your real estate agent will be able to help you find homes that fall within your criteria.

 

Evaluate the houses that you are considering. Work with your real estate agent to come up with a method to scorecard or analyze the houses that you are strongly thinking about purchasing.

 

Decide which home you would like to purchase. Make an offer to the seller on the home. Once you make an offer it is wise to stop shopping around for homes. The worst thing that can happen is that you find a home you think you like better than the one you’ve made an offer on.

 

Once the seller has accepted your offer and you have signed the sales contract, have the home inspection completed.

 

Make arrangements for the closing.

 

Purchase homeowners insurance and provide proof of the policy to your lender. This must be done prior to closing.

 

Make your moving arrangements.

 

If necessary, begin the process for school transfers or registration.

 

Alert necessary parties of your change in address. You can also have your mail forwarded through the postal service by putting in a request at your local post office.

 

Make arrangements for utilities at your new home. If you will be working with the same providers you can simply put in a request to have your services transferred at a certain date.

 

If you are having your items professionally moved, verify the arrangements with your mover.

 

Check with your lender to finalize the mortgage for the home buying process.

 

Pack your belongings unless you have arranged a full pack and move with the mover.

 

Bring your driver’s license for identification purposes. Your down payment is due at this time. Also bring any home buying closing costs that you are responsible for paying.

 

Keep in mind that this is a general home buying timeline. You can adjust the time depending on how long it takes you to find a home you like.

 

Once you’ve found the home you want to settle down in, the next step is to make is yours. This is done with a series of steps one of which is signing the sales contract. The sales contract is a legally binding document. If you are intimidated by signing one, you are perfectly right to feel so. Nevertheless, as long as you make sure the information contained in the sales contract is in your best interest, then you have nothing to fear.

 

The sales contract should include several pieces of information that have an impact on the sale. Here are the key pieces of information that most sales contracts will include.

 

·        A legal and physical description of the property being purchased. The legal description is used by the county government to identify the property even if the street address changes. The legal description of the property will never change.

·        The selling price and method of payment should be included. In most cases, a mortgage is the method of payment. In this section of the sales contract, there should be details about the amount of the down payment, mortgage loan, and earnest money deposit. The name of the escrow that will hold the earnest money must be included. If you have any contingencies about the mortgage, they should be listed as well.

·        The closing date must be laid out. Details about when and where should be included in the sales contract.

·        What’s included and what’s not included in the sale should be detailed. If the seller agrees to throw in appliances, it must be listed in the sales contract. Otherwise, you could end up purchasing your own appliances.

·        Any warranties that are included with the home should be detailed in the sales contract. A description of the warranty should also be listed.

·        If there is a well and septic, they must pass testing.

·        Termite and pest inspection should be conducted. The sales contract should detail not only who will pay for the inspection, but also the party responsible for any repairs if infestation or damage is discovered.

·        The exact date that the buyer will take possession of the home should be included. This date can be anytime before, at, or after closing.

·        The sales contract should include the amount of time that the seller has to respond to the offer, whether it is to accept or counter the offer.

·        Provision for arbitration is sometimes included.

·        Either the seller or the buyer will have to pay for property insurance up until closing date. The sales contract should stipulate the responsible party.

·        Any property disclosures pertaining to the house should also be included in the sales contract.

 

In many cases, the seller will have the sales contract, especially if he or she is working with a real estate agent. You might also want to have sales contracts on hand. You can purchase these from an office supply store like Office Max or Office Depot.

 

Even though you are selling your home without a real estate agent, the assistance of a real estate professional is still needed at various steps in the home selling process. The requirement of a real estate attorney depends on the laws in your state. Even if you live in a state where a real estate attorney is not needed, as a for sale by owner seller, it will still be beneficial for you to use one.

 

A real estate attorney can serve many purposes in the housing transaction. When you hire an attorney that specialized in real estate, that attorney is responsible for seeing that your best interests are met in the housing transaction. A real estate attorney can act as the escrow agent by holding down payments, documentation, and earnest money deposits. Not only that, the attorney can help you decipher and evaluate complicated offers you might receive from a buyer. In the event that the lender’s attorney does not handle the closing, your real estate attorney will host and handle the closing. If the lender’s attorney does handle the closing, then your real attorney will represent you in the process.

 

Your primary concern should be to find a real estate attorney that will provide you with assistance you need in the housing transaction. You can use a local or internet directory to find the names of some attorneys in your area. Asking friends or family who have recently sold homes for references is another way that you can find an attorney to assist you.  If there are neighbors with “for sale” signs in their yards, you can casually inquire about the real estate attorney they are using. Hiring an attorney that comes as a reference is often better than cold calling attorneys.

 

As you look for a real estate attorney to hire, you should choose one that works primarily with real estate transactions. Avoid choosing a criminal or family law attorney that handles real estate transaction on the side. Your interests will not be best served by an attorney that does not spend a significant part of his or her time in real estate transactions. Certainly do not hire an attorney that has never worked in real estate.

 

Along with experience in real estate transactions, price will be the other factor you use to choose a real estate attorney. The attorney you hire will have two major responsibilities: reading and advising you on documents and representing you at closing. Get a price quote from prospective real estate attorneys on those two tasks. You can get a discount from the attorney by letting him or her know that you will be preparing and filling out some of the documentation. Shop around among several real estate attorneys to get a feel for experience level and price charged.

 

The most important thing is that you have a real estate professional available to assist you through the transaction. Even if you have successfully sold a for sale by owner home before, it is better to have legal assistance than to attempt to complete the process on your own.