Thursday, September 04, 2008

Purchasing A Home in St. Louis, MO

MOST IMPORTANT - Get Pre Approved BEFORE you shop
Getting pre-approved will save you from looking at houses you can't afford and put you in a better position to make a offer when you do find the right house. Sellers expect a pre-approval when your contract is submitted.Pre-approval is quite different from pre-qualification. Pre-qualification is merely a cursory review of your finances, pre-approval is based on your actual income, debt and credit history. There is no fee to get pre approved.

Good credit will get you a better interest rate.
Since most people need to get a mortgage to buy a home, you must keep your credit history as clean as possible. Six months before you seriously begin house hunting, get a copy of your credit report. Make sure everything is correct. Should any problems appear, handle them quickly by contacting the credit reporting agency.

Although lenders like to see 10 to 20% as your down payment, don't worry if you only have 5 to 8%. These loans do carry slightly higher interest rates, but they can be great for first time home buyers who anticipate increasing income potential and equity increases. Although credit has tightened up the last few months there are plenty of programs out there.

Your new home should be in a good school district, even if you don't have children, because when it comes time to sell, a good school district will increase your homes value.

Real Estate Professionals. Hire an Experienced Realtor who understands the home buying process. Interview at least 3 buyers agents before deciding. Look at their experience, education, knowledge and ask for references.

When you find the perfect home, move quick. Your buyers agent should be able to provide comparables of houses that sold in the same area that are pretty much the same in age, square footage, and amenities. Based on the average sale price of these comparables will allow you to reach an offer price. Always leave room to negotiate. If you really want the house, don't low ball, it may upset the seller.

By researching the comparables and knowing the neighborhood you should be able to offer a fair purchase price for the house. In a buyers market you have the advantage while in a sellers market the seller has the advantage. Look around the neighborhood, are there a lot of for sale signs or very few?

Once you agree on a purchase price, your buyer's agent will draw up a sales contract offering to purchase the house which will includes the closing date. A good buyers agent will make the purchase contingent on a few things:

1. Financing, that you can get a loan with rates and terms you agree with
2. A satisfactory building inspection by a licensed home inspector
3. The home is insurable
4. The title is clear of any liens or claims
5. An acceptable closing date normally 30 -60 days after submission

Two days before the closing you will receive a HUD 1 Settlement Statement from your title company that lists all the charges you can expect to pay at closing. Normally you can figure those costs at 2-3% of the purchase price.

On your scheduled day of closing you will go to the Title Company to sign the documents. Normally the closing is attended by your lender, your buyers agent and the title company employee. Once all the paperwork is completed and signed your Realtor will hand you the keys to your new home.

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