2. NEGOTIATE- Always counter! Remember that almost all contract terms are negotiable, from the payment price to the due diligence period. Never settle until you get the terms you want. Sometimes people need to say no a few times before you can get to a yes! An excellent negotiator will make sure that the terms are also reasonable for the seller. Most great deals end in a win-win situation. Show the other side that you care about their needs and are willing to meet them half way. No one should walk away feeling jilted.... "If you do counter, I will counter." ~Daymond John (Successful entrepreneur and multi-millionaire)
3. VALUATE- To set a value on... What is your investment really worth? Have you thought about the future of your investment or hired the proper professionals to appraise, assess, evaluate, measure, determine value? Skipping this step could mean the difference between moving into your 1st home with built in equity or being upside down in your mortgage within the first 2 years of your purchase.
4. ESTIMATE- any and all cost involved with your investment. A common mistake among 1st time home buyers is that they fail to estimate the total out of pocket costs. FHA loans require 3.5 of the purchase price to be paid upfront as your down payment. In addition to that there are closing costs or settlement charges associated with the loan. Closing costs in North Carolina can be between $3400-$4000. This includes fees such as loan origination, appraisals, credit reports, a variety of home inspections etc. An awesome lender will point each and every one of these out to you so that you have planned ahead, know what you are dealing with and make sure you are ready to tackle the process head on.
Below is an excel excerpt detailing what the buyer is required to pay out of pocket.
So in this case, lets just say the home is $130,000... 3.5 % down
$130,000x .035=$4,550
Down Payment $4,550+ Closing costs $3,908.29
That brings the total out of pocket cost to buyer up to $8,458.29
You want to know all of this before you sit down and make your final loan application.
5. SEE it through! Seal the deal! You have done all of your homework so now is not the time to lose focus. Occasionally there are a few issues that can set first time homebuyers back. Sometimes during your investigation process you may find that your credit score is a few points or even alot of points away from what is required to obtain a mortgage loan. Remember that your credit score is only a snap shot of your credit history at a particular point in time. It can be repaired. In some cases buyers may find themselves strapped for cash and can not afford the downpayment or closing costs. This does not mean that you don't deserve to have your own home! There are plenty of programs in North Carolina that will help you make your first purchase. Ask your Realtor about downpayment assistance or foreclosed homes that have special incentives for owner occupants so that the downpayment may be as low as $100.
Remember: I-nitiate/Investigate
N-egotiate
V-aluate
E-stimate
S-ee it through
T-hink about your next investment
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