Buying a home might be one of the biggest financial decisions to make in your lifetime. The real estate market has changed in the past few years. Price fluctuation, more regulations from the government and stricter lending practices by financial institutions are just but a few of these changes. If your home purchasing process is mishandled, your property dream could give you a lot of grief. Here are some tips on how to buy a New Jersey property in 2019.
Make a Decision
As a prospective buyer, you must first decide the type of home you want to buy, the type you can afford and the location. The first step in the property purchasing process is contacting a mortgage broker or a bank to provide you with a pre-approval or mortgage commitment letter. Real estate agents need to see this letter before they can show you a New Jersey property or accept your purchase offer. The seller has to be sure you are financially capable of purchasing the home.
Choose the Right Real Estate Agent
Choosing the right real estate agent is critical for a good purchase outcome. You need a realtor you can trust and skilled enough to work in your best interests. When you find a home you are interested in, and the real estate agent acts as a go-between to negotiate for the best price.
The seller pays a real estate agent a commission, and it ranges from 2% and 6% of the buying price. It is typically paid when the transaction is successful.
Real Estate Contract
Your realtor offers the seller the real estate contract, which includes all offer details such as price, property specifics, deposit amount, closing date, etc. The seller accepts the offer and signs the contract, and the signed agreement is then brought to you to sign. The agreement then makes its way to both your attorneys for attorney review, which takes at least three business days, depending on the contract. Your attorney goes through the contract terms, advises you accordingly and negotiates a better mortgage contingency. Ensure your attorney has vast experience in the real estate industry.
Contracts to buy New Jersey properties reserve the right for a buyer to inspect the property. State law requires the seller to have a smoke detector and fire inspection, and continued occupancy certificates during closing. Hire a licensed engineer or home inspector to do the review. The inspector will check the electrical, plumbing and structural aspects of the home. Seek guidance from your realtor, home inspector or attorney.
There are many mortgages available such as adjustable and fixed-rate, VA, and VA mortgages. When applying for a mortgage, consider the interest rate, term, and closing costs. The closing costs will affect the amount you will finance, including the closing funds. The crucial questions should be whether it is possible to prepay a mortgage, how insurance and real estate tax are calculated, and how late payments are handled. Use a licensed mortgage broker when applying for mortgage financing.
Title and Homeowners’ Insurance
The title company orders a new survey or approves an existing one if both the buyer and seller’s mortgage lenders accept it. After closing and the home deed is recorded, the title company gives you an owner’s title insurance. The owner’s insurance policy covers your premise ownership among other things.
Once you have the mortgage commitment from the mortgage lender, you’re ready to close the deal. Inspect the house 48 hours before closing. The settlement agent prepares separate Closing Disclosure (CD) and provides both buyer and seller the CD for review just before closing. During the closing, the mortgage loan funds are made available to pay for the closing costs.
Look for a reputable real estate agent who will guide you through the process of buying a property in New Jersey.