I AM A HOME BUYER… WHAT DO I NEED TO KNOW? (Continued)

Financing…

In addition to your due diligence contingencies, the CREC contract includes several financial contingencies. You will spend a substantial sum of money on your home – you want to make sure that it is money well-spent.

If you are borrowing money to purchase your home, you will want financing on terms that are acceptable to you. For example, you may want to borrow 80% of the agreed-to purchase price with a loan amortized over 30 years at a particular fixed rate of interest. The contract can be written with a contingency (the loan conditions deadline) specifically related to securing financing on your terms.

As noted, you will want to insure your home. There is a CREC contract contingency specifically related to your ability to purchase insurance that is acceptable to you in terms of both coverage and cost.

Finally, even if you do not intend to borrow purchase funds, there is one finance-related contingency that you may want to include in your purchase offer – an appraisal. Generally, your offer will be based on an analysis of recent sales of like properties in the surrounding area. You may want a professional appraisal to confirm that analysis. If you do intend to borrow money, your lender will almost certainly require an appraisal.

TAKE THE FIRST STEP

Leading up to the writing of a purchase offer, you will work with trained professionals who will help you carefully consider location, home features and budget. The contract itself is a series of contingencies and each contingency will afford you the opportunity to make sure that the home you think you love is everything you image it will be. But one part of the home buying process is missing – the first step. As you contemplate the prospect of home ownership, you may have fears, doubts or misgivings… what if I dislike my neighbor… what if I need to fix a leaky faucet…

The first step – overcoming your fears and resolving to take the plunge – is big, indeed, it is the biggest. But if you prepare yourself, by assembling a first-rate team and by gearing up to perform your due diligence, you can develop the peace of mind necessary to proceed. And with that peace of mind you will soon realize the great American dream of home ownership.