PSA For First-Time Home Buyers:
I get alot of the below, esp. from 1st time buyers, and when financing is involved:
1. “I need to find the perfect home!”
2. “I'm worried that I will buy a bad home full of issues.”
1. The "Perfect" Home: Your first home is generally NOT your forever home. And right now with the housing shortage crisis (which is NOT going away anytime soon), you as a buyer can’t be too picky as to what is available. If you don’t buy it, someone else will. As human beings, we always want more, and eventually, it’s likely you would want to upgrade. Life also happens, which may be a growing household, job transfer, etc. Your first home will help you get to your bigger home later down the road with the equity you build and rolling that into the new home. When you got your very first car, I’m sure it wasn’t a 370Z, but eventually, you work your way up to your dream car. Same concept.
2. Home Purchase: If you are financing the home, the bank/lender is buying the home upfront and you are making payments until paid in full. The bank/lender is NOT going to buy a product that isn’t a sound investment (remember, most banks/lenders sell your loans to the secondary market and the loan has to make sense to the investor buying). You have the “Big 4” that needs to clear and pass before being able to close: Title, Insurance, Inspection, and Appraisal.
Title: Any clouds or issues need to be cleared up before closing.
Insurance: Property needs to be properly insurable and insured before the deal can close.
Inspection: Any issues the insurance company may require repair before insuring.
Appraisal: Does the value of the home make sense in relation to the purchase price? Banks/lenders will only loan up to the appraised value (not purchase price), which is why you never waive esp. this contingency as the buyer.
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