It’s a new year and you’ve decided that you want to buy a home in Reno, congratulations! This is not only a big step for you and your family, both emotionally and financially. There are several things you are thinking about, where you want to live, how much house can you afford, do you need a buyer’s agent, and how does the home buying process work? These are all great questions and we will give you all the home buying advice you could possibly handle in 2015.
Things to consider when purchasing a home
- Location is key – The location is likely to be one of the first thing that your buyers agent will you ask you about. Are you looking for those mountain and city views, maybe a bit of privacy, school district, or if you’re an investor and you’re only worried about a specific location’s resale value. Do you want to be near a shopping center, restaurants, or maybe the movie theater? These are all valid points and important pieces to finding what you truly want in the location of your home. Or maybe you’re looking to be in that 55 and over community? You’ve heard it before and I’ll say it again, location, location, location. Yes, it really is that important and it ultimately depends on what you plan to do and want.
- How Big? Single or Two story? Do you have room to grow? – Whether you want to be in a single story home or two story home, the square footage, number of bedrooms/bathrooms are some of the important things that you must think about when your agent is giving you home buying advice. Are you planning on being in this home for a few years or planning on kids down the road? Will there be a big enough yard for your kids to play or for your dog to run around? Is this a home for you to retire in and you feel that stairs might be an issue? These are just some of the key factors in deciding on finding the right home.
- What Features are necessary? Do you need granite counters in your kitchen, how about that three car tandem garage that your husband needs for his extra cars, or maybe you really want that walk in closet in your master bedroom for all those extra hours you spent shopping this past black friday. Is the lot size important to you? Do you plan on having summer bbq’s or do you want a low maintenance patio home? One quick tip, a patio home’s resale value usually isn’t as good as a home with a slightly bigger/normal lot size. These are all very important factors in the home buying process.
- School District? Are you looking for a specific school district for your child? Or are you just curious as to what schools are the best in Reno. Edawn provides a great resource, please visit their site for more information. (http://www.edawn.org/quality-of-life/education/#Public%20Higher%20Ed).
- New home? It really depends on what you are looking for. Are you looking for a well established neighborhood with amenities or great schools? We’re not saying that a new home won’t have these things, but generally the resale homes will have more of these options. Another reason a new home is probably not for you. Although, in Reno we have several new home communities that are in the same area as our resale homes, so you have options. Are you looking for your home to be energy efficient, have little to no repairs, a warranty, and be able to customize your home? You’ll be able to choose your flooring, counter tops, color scheme, kitchen appliances, and add in that lovely covered patio and BBQ you wanted. If any of this interests you, then buying a new home might be for you. There are pro’s and cons to each type of home and of course, price is a factor as well. Is the new home comparable in price or much higher than your potential resale home? If the new homes in your area are higher than a potential resale home and remodeling your home is not of interest to you, and the repairs and issues that might come up along the way don’t bother you, resale might be a great fit for you!
- Resale home? If you’re looking for a more well established neighborhood and community, a resale home might be a good fit. We’re not saying this is true for all new and resale homes, there are several new home communities in Reno that are in the same area as these well established communities, so it all depends on what city you’re in and your current market. Are you a do it yourself person who loves little projects and appreciates mature landscaping? In a resale home there could be failing appliances, faulty wiring, carpet stains, scratches all over the hardwood floors, chips in the stucco and paint, cracked foundation/walls, no landscaping, or maybe your pest inspector missed that moisture in the crawl space. From remodeling the kitchen to replacing the carpets, the cost for these projects can add up very quickly. These are all things that you have to think about when purchasing a resale home. If you’re in a market where resale homes are substantially cheaper than a new home, we certainly understand why it’s attractive to you. But, in a market where a new home might be around the same price as a resale home, we often suggest the new home.
The Process of Purchasing a Home and Why you need Home Buying Advice
- Where area do you want to live in? Ultimately, the first thing you really do in the home buying process is decide what city or area you want to live in. The search usually begins on the internet, whether it be on zillow.com, a realtors idx website(such as www.renohomesale.net), realtor.com, or if you already have a realtor, your realtor will send you homes directly from their desginated MLS (multiple listing service, this is where realtors submit their listings). There are several other sources that you may find possible listings from as well. This could be a local newspaper, magazine, sign you see in someone’s yard, or even post paid mailings that realtors send directly to you.
- Finding a Mortgage Lender. Generally speaking, searching for a good mortgage lender in Reno is probably the next thing you should do. We’re not saying that this is what most people do, it’s just a suggestion. If you would like to get in contact with one of our preferred lenders, please let us know and we will provide this information to you directly. We do not have any direct affiliation with any of our preferred lenders, they are simply lenders that we use on a day to day basis and have a good professional relationship with. If you’re going to be paying cash, please disregard this section.
- Looking at homes! So, it’s your first time looking at homes with your realtor and you find the PERFECT HOME! I know, it sounds great doesn’t it? As a realtor, we do love finding you the right home, but we suggest that you take the time to look at all of your options. Sometime’s you could be in a very face pace market and you have to act fast, but buyer’s remorse is something we see day in and day out. We really do have your best interests in mind. We want you to wake up tomorrow still happy about your decision and excited to move forward, so make sure to go over your pros/cons list and make sure that everything you see in this home is what you really want.
- Finding the right realtor for you. You will want to find a realtor that has the proper knowledge and experience to help you find the perfect home for you at the right price. There are several great ways to find a realtor, first we suggest that you ask your friends and family if they have anyone that they can refer. If your friends and family have someone that they can personally refer, that usually suggests that the realtor they used did a good job. Unfortunately , if that isn’t case, (www.zillow.com and www.trulia.com) are great places to look up agents ratings and reviews.
- We really found the right home! So, you really found the right home? At a certain point and after seeing so many houses, you really will find the right home. Here is a breakdown of the process once you find the home you want to buy.
- Submit an offer. Your agent will write up an offer for the home you’re interested in. Your agent will also provide you with disclosures and other documents that pertain to the home buying process.
- Counter Offer/Negotiations. In certain situations, your offer might have been too low, you might have asked for too much personal property, etc. You will be presented with a counter offer by the seller. You have the option to accept, reject, or counter their counter offer.
- Offer has been accepted. Congratulations! Your offer has been accepted and you are on your way to being a homeowner, how exciting!
- Buyer will deposit earnest money. To show the seller that you’re serious, you will place an earnest money deposit for the property you wish to purchase. The earnest money deposit will be paid directly to the title/escrow company, not the seller. A general rule of thumb is 1% of the purchase price for a proper deposit, but of course the more you put down, the better your offer looks and shows your level of seriousness and commitment. Do not worry, this money is counted towards your down payment later.
- Open escrow. Your agent will send your fully executed offer to the escrow/title company along with your earnest money deposit and escrow will be opened. The escrow company will deposit your check and hold all funds until the time of closing, which then they will distribute the proper funds to the (lender, inspectors, mortgage brokers, real estate agents, etc). Don’t worry, escrow officers are a neutral third party and they can’t do anything without both parties agreeing to it, in writing.
- Finalizing mortgage loan approval. Your agent will also send a copy of your fully executed loan to your loan officer for a loan lock and determine your interest rate. Your lender will also order a title report to show if there are any issues with the title on the home and require an appraisal(an in depth evaluation of the home, which will let you know what it’s worth) which is paid for by the borrower.
- Inspections take place. Whether you’re looking to get a home inspection, pest inspection or even an HVAC inspection, this is the time to do it. If anything is uncovered during your inspection, your buyer’s agent will draft up a repair list to send to the listing agent. Depending on your repair allowance, you will ask for specific items that are to be repaired or replaced. Don’t worry, if something serious really comes up in the inspection, you will be able to back out of the transaction. But, that’s not a very optimistic way to look at it, so let’s move on!
- Home owners association resale package. Depending on whether or not the home you’re purchasing is in an HOA, you will get an HOA resale package. The escrow/title company will order this for you at the seller’s expense. The seller is required to pay for and provide this to you by law, no exceptions.
- Contingency removal. After your appraisal comes in at value or above(let’s hope), you approve of all repairs and inspections, the title comes back clear, you’re almost there. You can see the finish line!
- Close of escrow! Today is the day, whether it be your actual day of closing or not, you can sign the day of or prior to closing. Both parties will schedule times to sign at the title/escrow company, this includes all documents pertaining to the purchase of the home (deed, loan documents, HOA transfer docs, etc). Most title companies and lenders suggest wiring the necessary funds to the title/escrow company in the morning before the banks wire cut off time or a day earlier if you really want to be prepared. This further insures that you have a smooth and successful closing! Once signing is complete, your title/escrow company will process the necessary paperwork with your county and within a few hours, you should be officially on record! This means that the transfer of ownership is complete and you are now a homeowner!
- Congratulations, its time to MOVE IN! It’s time to finish packing those boxes, loading that U-Haul and start unpacking at your new house, get on it!
Who is involved in a Real Estate transaction
- Realtor -A realtor is generally involved on both ends of the transaction, from the listing agent to the buyers agent.
- Escrow/Title Officer – In some states you will deal with an escrow officer and a title officer, but in Nevada they’re the same company. A good escrow officer is a great asset and can really make the whole transaction a very smooth process.
- Inspectors – Home inspectors, pest inspectors, HVAC(heating, ventilating, and air conditioning) inspectors, and roof inspectors are just some of the inspectors you might deal with during the purchase of your home.
- Lender – A lender is someone you will deal with only if you plan on getting a loan, if you are planning on paying cash this is something you don’t have to worry about.
- Insurance Agent – Last but not least is an insurance agent. You will need to make sure your new investment is covered by homeowners insurance.
Do I need a buyer’s agent?
- You might not think that you need an agent, but we highly recommend it. This has nothing to do with us being a team of realtors, but it has to do with the amount of liability a real estate transaction has. Do you as a potential buyer want to negotiate on your behalf with quite possibly the biggest financial transaction/decision of your life? A Real Estate professional does this on a daily basis, we negotiate the terms and conditions to the best of our ability, to get you the right home for the right price. An experienced buyer’s agent will help answer your questions, guide you through the lengthy process, and look out for your best interests every step of the way. They will submit offers, counter offers, recommend good contractors and inspectors, and above all, help you find that special home.
How do Buyer’s Agents get Paid? Does the Buyer Pay?
- This is one of the most common questions that we get asked, do we (the buyer) have to pay the buyer’s agent? Your agent is not paid by you directly, but by the seller of the home. The listing agent has already negotiated the commission with the seller and as a buyer’s agent, you are generally paid half of the total negotiated commission.
- If the buyers agent gets paid more commission depending on the home, shouldn’t I be worried about my buyer’s agent wanting me to move my price range up or to pay more for a home? Generally you shouldn’t be worried about this. Yes, it will involve more money, but agent’s rely on their reputation and referrals to keep their business going. If they value that, they truly have your best interests in mind, regardless of the commission.
Hopefully this gives you a good amount of information to help guide you through your home buying process. After all of that, do you still want to go through this tedious process without a buyer’s agent? It’s entirely up to you, but if you need anything, please feel free to call or email us anytime if you need any help.
Thanks so much!
Mike Smith Team 775-773-8525 @ RenoHomeSale.net