Buyer's Guide to Success

Making a Home Buying Offer

BROWN DOG'S BUYING ADVICE

Buying a home is a significant and exciting decision. This section provides professional real estate advice and helpful home buying tips. Should you have any further questions, please don't hesitate to contact us for help. 

Here Are First Steps:

The Internet and real estate professionals are the top two resources most buyers turn to when searching for a home.1  When it’s not convenient for you to speak directly with a real estate professional, our website has been designed to help improve your overall home buying experience and provide the guidance to reduce stress, save time, and make you a savvy, successful consumer. Brown Dog Agents are ready to make a full-time commitment to help you capitalize on current market opportunities and assist you in making an informed decision.

To ensure you make the right choice for the long term, a Brown Dog  Agent offers extensive knowledge in our local market with:

  - Neighborhoods, schools/ boundary lines and market conditions

  - Referrals to Mortgage specialists who can assist you with your financing

  - Technology that gives clients an edge, along with multiple resources available on our website

Would you like to receive more information on the home buying process? Contact a Brown Dog by phone, email or a simple text. Finding the right real estate agent can make you a properly informed consumer and improve your overall home buying experience.

LOOKING FOR A HOME?

The single biggest reason most people buy a home is the simple desire to own a home of their own. At the same time, homeowners accumulate wealth for the future while enjoying the benefits of a residence that they can use, improve and enjoy. What’s different is each individual’s wish list of essentials; from public transportation to the number of bedrooms, we can help you create a comprehensive list and go from there.

What's the Right Home For You?

Looking for a house to buy? This section will help you create a prioritized list of features to narrow your search... 

Before deciding which house to buy, consider your lifestyle, current and anticipated housing needs and budget. It’s a good idea to create a prioritized list of features you want in your new home; you'll quickly discover finding the right house involves striking a balance between your "must-haves" and your "nice-to-haves."

If you love to cook, you'll appreciate a well-equipped kitchen. If you're into gardening, you'll want a yard. If a home office is a must, you’ll need a room that will provide you adequate work space. If you have several cars, you may require a larger garage. Use this list as your search guide.

Next, think about what you might need in the future, and how long you are likely to live in this particular home. If you're newly married, you might not be concerned with a school district right now, but you could be in a few years. If you have aging parents, you may want to look at homes that offer living arrangements that could accommodate them as well.

It’s important to think about your new home’s location just as carefully as its features. In addition to considering the distance to work, evaluate what matters to you in terms of services, convenience and accessibility, such as shopping, police and fire protection, medical facilities, school and daycare, traffic and parking, trash and garbage collection, even recreational facilities.

Be sure to talk to your real estate professional about where you want to live and what’s most important to you. While buyers frequently use the Internet to gain access to listings or available properties for sale, an agent brings value to the entire home buying process. He or she is available to analyze data, answer questions, share their professional expertise, and handle all the paperwork and legwork that is involved in any real estate transaction. Our agents can help their clients narrow their choices by sharing market trends and local information.

TIP:  It’s also important to consider the type of home that suits you best. Is it a condominium or a co-op? A townhouse or detached single-family home? Do you want brick, stone, stucco, wood, vinyl siding, or something else? Do you prefer a new home or an older one?

How Much Can You Afford?

How much home can you afford? Review your income, savings, and debt to figure out how much home you can afford. Visit our Finance Center Tab for assistance. 

Now that you know what you're looking for, the next step is figuring out what type of home you can afford. A review of your income, savings, monthly expenses and debt will be necessary.

Early in the process, you'll want to get pre-qualified for a mortgage loan. It enables you to move swiftly when you find the right home, especially when there are other interested buyers. It also indicates to the seller that you are serious and can afford to buy the property. A pre-approval is a simple calculation done by a mortgage lender that tells you the amount you'll be able to finance through a loan and what your monthly payment will be.

The price you can afford to pay for a home will depend on several factors, such as:

  • Gross income

  • The funds you have available for the down payment, closing costs and cash reserves required by the lender

  • Your debt

  • Your credit history

  • The type of mortgage you select

  • Current interest rates

 

Another figure that lenders use to evaluate how much you can afford is the housing expense-to-income ratio/ DTI. It is determined by calculating your projected monthly housing expense, which consists of the principal and interest payment, property tax payments and insurance premiums on your new home loan.

Each buyer is unique, and a mortgage professional can help you find out just what you can afford. Your income and debts will typically play the biggest roles in determining your price range. It's simple to make an estimate – just run the numbers for yourself using one of our calculators in the finance section tab.

Common questions to be answered for clear understanding when it comes to buying a home there are a lot of uncertainties, such as: Do I have enough job history to qualify? Is my credit score high enough? Do I have enough credit history? These are just a few of those burning questions. The loan process can seem daunting, but with proper guidance information you can  fill in those gaps. Rather than rush a loan out the door, take time to choose the path of care.

Know Your Neighborhood?

Evaluating a neighborhood and surrounding areas thoroughly is essential. 

Evaluating a neighborhood and surrounding areas thoroughly is essential.

When you buy a home, you're investing in a community. You'll spend a significant amount of time and money supporting the schools, community organizations and commercial centers in the area. Before you make the final decision, take a good look at the location and make sure it fits your lifestyle. For example:

  • Evaluate the property’s proximity to other important locations in your life. How long will your commute time be? Is there a hospital or doctor's office nearby? What about schools, childcare, shopping, family and friends?

  • Consider all of your transportation options. A new home could lend itself to public transportation options or carpooling. Depending on the type of community, you may be able to find alternative methods of transportation. Take the time to drive from the new home to your commuting destinations, to get a sense of what your daily life will be like.

  • Make sure you feel comfortable in the area. Drive around the neighborhood at different times of the day and night on multiple days of the week to observe activity and noise levels. An educated buyer is a happy one!

Our agents are a tremendous resource, ask your agent for information about schools, shopping centers, parks or other amenities that are important to you. Buying a new home is about more than the structure and property. It's about your new lifestyle as well.

Already Have a Home/ Shopping for a Home?

Buying a home while selling an existing home has its own set of considerations; this section provides expert buying advice and can help you navigate these challenges successfully. A Brown Dog Agent can help you shop for a home, compare homes, and compile your unique wishlist to find the perfect home for you.

BUYING YOUR HOME

Buying a property is a big step involving a substantial long-term financial commitment, so it requires a thorough assessment of what you can afford. Buying a new home and selling an existing home at the same time has its own set of challenges. With knowledgeable planning, you can ensure everything goes smoothly. Before putting your house on the market or committing to buying a new one, take a look at the prices of houses in the areas where you'll be selling and buying. You'll need a realistic idea of sales prices for similar houses, so you can assess both your buying and selling position.  

What if you're unable to time the sale of one house with the purchase of another? You may own no houses for a time, in which case you'll need money in the bank and a short term rental or temporary place to live. Or, you may own two houses at once. That's why it's important to have a backup plan. Here are some options to consider:

  • Research short-term rental and storage options (family, friends, storage facilities, containers).

  • Bridge financing (a short-term loan) for the down payment on a new home backed by the equity in your old house.

  • Buying a Second Home/ Investment Property 

  • Buying a second home isn't all that different from buying a first home. Affording it usually depends on your ability to qualify for a mortgage on the second home. Benefits include a getaway for the family on vacations or holidays, a future retirement home, or renters making your mortgage payments for you.

  • Keep in mind that if you declare it as a rental, your mortgage might be slightly higher and your down payment requirements higher than a standard mortgage. Work with your lender to create a customized loan program with the best combination of rate, points, and closing costs to meet your needs.

  • TIP: A second home can be a good investment. To make the most of the opportunity, be sure you factor in sources for your down payment and monthly expenses (including the costs of maintaining the property).

 

Making an Offer

Making an offer to purchase a home  has its own set of factors. Rely on a Brown Dog Agent’s experience and knowledge to make a successful home buying offer. 

Once you’ve found your ideal house, it’s time to get started with the financial and contractual side of the purchase. Let your agent guide you through this process. Purchase contracts vary in length and terms from state to state, and sometimes within a state.

Multiple offers on the same home are not uncommon, so you may only get one chance to make an offer that the seller will consider. That's why it's important to think carefully about your strategy. In most cases it is usually better to have your real estate professional present the offer. If you have any personal interaction with the homeowner, avoid sharing any information about your move, your current housing status, financial status or your feelings about their property - positive or negative. This could work against you in future negotiations.

Buying a home is one of the most important decisions you will make. That's why it's in your best interest to choose an experienced real estate agent who listens to and understands your needs, and has detailed knowledge of the area in which you want to want to live.

When you choose Brown Dog, you're dealing with a professional who understands your concerns and will provide you with the personalized service that makes all the difference.

What should you expect in your first meeting with a real estate agent? A Brown Dog Agent will typically talk to you about the neighborhood where you want to live, home prices, schools, transportation, and the surrounding commercial and residential areas. They can also address the pros and cons of using a buyer's agent versus a sales or dual agent.

When you're ready to visit houses, ask your Brown Dog Agent to help you with:

  • Arranging showings

  • Tracking the properties you've seen

  • Identifying homes that meet your criteria and keep track of your "what's right for you" list

TIP: After touring each home, write down what you liked and didn't like/ take notes. When you find a better one, use the new favorite as your standard. This will help us find exactly what you are looking for to fit your needs.

How Much?

How much should you pay for the home? This section will help you to determine an appropriate amount to offer to secure a winning bid. 

Your Brown Dog real estate professional can help you find out what other homes have sold for in the area, and how much money you might have to put into repairs or renovations. These considerations should be a factor along with the amount you're comfortable spending.

In addition to sale prices of other comparable homes, there are several ways you can come up with a winning bid. For example:

  • The condition of the house. Is the home in "turn key"/move-in condition, in need of paint and other cosmetic improvements, or a fixer-upper that needs real work?

  • The market. If you are in a buyer's market — where there are more homes for sale than there are people to buy them — prices are probably stable or falling. If you are in a seller's market — where there are more buyers looking for homes than there are homes for sale — prices are probably moving upward.

  • Your ceiling. If you have a credit pre-approval, you know how much you can borrow for your home purchase. Of course, you may not be comfortable paying as much as you've been approved to borrow, so think carefully about your financial situation before making an offer.

Next, decide how much you are willing to pay for a home. Remember, the advertised price of a house is just a starting point – it may take quite a bit of negotiating to arrive at a final cost.

TIP: The value or disadvantage of certain features can help or hurt resale. In some areas, a swimming pool actually detracts from a home's value, and makes it harder to sell. In neighborhoods with two-car, attached garages, a single-car or detached garage may affect the home sale and future value.

Once you’ve made the decision to become a homeowner and picked the house, you may need to apply for a loan. This process might seem daunting, but your lender will guide you through it. The process will be even easier if you know what to expect and prepare for it.

Here are the high-level loan application steps:

  1. Prepare required documents:

    • Two years of employment history, current employment status and salary are needed. Employment letters can be used to explain gaps in employment.

    • Two years of W-2s (this does not apply if self-employed) and tax returns allow the lender to be sure that your salary is high enough to make the mortgage payments every month.

    • Most recent pay stubs for the last 30 days tell the lender that you’re still earning money similar to the amount on your tax returns. (This does not apply if self-employed, but the lender will likely require a profit and loss statement.)

    • List of assets, including bank statements, let the lender know that you have the money to cover the down payment, closing costs and a reasonable emergency. 
       

    • Submit the application. Once you’ve prepared the required documents, the first step with the lender is to apply for the home loan. Of course, you will need to provide personal information, as well as information about the property you’ll be purchasing, such as the address and estimated purchase price.

  2. Provide your documents. Submit your documents, such as pay stubs, W-2s, bank statements and employment history.
     

  3. Get pre-approved in as little as 24 hours. Once your loan application is submitted, you should receive your pre-qualification in as little as 24 hours.

Lease Options

Looking to buy home through a lease option? Learn about lease options here, or contact a Brown Dog Agent for complete support. Looking to buy home through a lease option? 

 

A lease option is an arrangement between the buyer and the seller to purchase a house after renting it for a specific period of time. A portion of the rent would be applied toward the purchase if the option is exercised. This is referred to as rent credit. Most institutional lenders will accept rent credit as part of the down payment, if rental payments exceed the market rent and if a valid lease-purchase agreement is in effect. A copy of the valid lease-purchase agreement must be attached to the loan application. Read any lease option arrangement carefully for details about transferring the option and other important concerns.

All Cash

If you are planning to buy a home with cash, that's great. Though most buyers don't buy a home with all cash, anyone considering such a move may be wondering how it’s done. Because all cash buyers sidestep the time-consuming loan qualification process, the deal can close very quickly. The primary advantage of buying a home with cash is completely avoiding mortgage interest. Buyers also save money that would be spent on loan origination fees, required appraisal, some closing costs and various other charges imposed by the lender.

BEYOND CLOSING

What happens after you close on your house?  Brown Dog will be your companion and  continues to provide guidance after the sale is completed. Visit our closing tab for more detailed information. 

Inspection

Home inspection is an important step in the buying process.  This section offers helpful information that can help to avoid potential problems after the purchase is complete. We have resources here available on this website, visit our service partners tab. This is a great way to get to know your home before you move in/ following closing.

Insurance

Homeowners’ insurance protects your interests in the event of  natural disasters and catastrophic events. We have resources here available on this website, visit our service partners tab.

Timeline and Paperwork

In the home buying process, ownership of the home is officially transferred to you at the closing meeting. Know what to expect when you close on your new home.

Moving In

Our home moving checklist can help you make your move much easier. 

Moving_edited.jpg