|
|
|
|
Who We Are
Money Focus Mutual Funds Insurance Mortgages Taxes Step by Step Hot Topics Contact the Editor
Featured Site AfterHourTrades.com, Inc. Featured Columnist: 
All content is © copyright (1999-2003) BonPaulProductions (all rights reserved) |
Order your copy of Building Wealth in a Paycheck-to-Paycheck World by Paul Petillo. It is packed with safe, proven wealth-building strategies that cover all the major components of a balanced financial plan, including:
Closing the Deal You have made the offer. That phrase just kind of hangs out there, and it's a legally binding phrase at that. If the buyer likes what has been offered, the sealing of the deal is only a formality. The place has been inspected and both buyer and seller have reached the stage of the agreement where the transfer is ready to begin.
A not so minor formality is the sales contract itself. It should include a legal description of the property and the selling price. The mortgage will be mentioned with all its nuances such as rate of interest, length of the loan, and of course, the amount. The money agreed upon as deposit will be another part of this contract as well as the company the will hold the cash.
There may be inclusions or in some cases exclusions. These are simply what is or isn't included in the sale. Things like hot tubs, or appliances may stay or go with the seller depending upon the deal you have struck. The repairs have been scheduled as per your agreement and the number of days allowed for this is usually stated in this part of the contract. Termite and pest inspections, well and septic inspections, are also part of this never ending list of stuff that needs to be addressed. A short list of disclosures about the property will also be provided.
You should at this point start shopping for insurance. Proof that the home will be insured not only is necessary but keeps the lender happy. And protects the money involved. This may involve more cash out of pocket. Hey, you are buying a home, it is all cash out of pocket from here on in. Try not to roll these costs into the loan itself. No one should have to pay for something like this spread over thirty years.
Some places have what is called a round table closing. This is a meeting between all interested parties (realtors, buyers, sellers, attorneys) at the Escrow office, or Title Company. These folks do the paper work. And they have a mountain of it to get through. Doing it this way, or without everyone, it is the time when you agree to everything and are allowed to be sure that any necessary repairs that the sellers was to have made, have been completed. This is an excellent reason to hold up the closing of the property and is far less expensive than chasing the seller down afterwards. That can get expensive. Want to see what the contracts look like? Here's a sample.
Like any legal document, make sure things are the way you have agreed, and that you understand all the contents of the documents. Be careful about the numbers, specifically the interest rates, and any other costs that you might have to pay. And be sure to ask when and where you are getting the keys.
But first... let's ask ourselves some questions.
The mortgage payment for this home is going eat up about thirty percent of your gross monthly income. Can you afford this?
Is a house that you purchase using the simple formula of 2.5 times your gross annual income going to be the house you want? Will it be "all that" to you and your needs, present and future?
Is it cheaper to rent to get the needs you have fulfilled? It might be. Everyone wants you in that home, but not being able to afford it is not any fun at all.
Have you added in all of the additional costs that owning will cost? Utilities, maintenance, emergencies and emergency repairs, and these costs don't and aren't included in what you would like to do once you own the place. Although it may take years to get the house just the way you want it, you are still going to want to do some things to make it more livable.
Do not allow yourself to become cash poor. We have discussed this before at this site. The temptation to buy more than you can reasonably afford only lends itself to using borrowed money to stay afloat. If it's your fist home, it won't be your last. So don't ruin yourself financially on the first time out. Buy what you can afford after you have answered all of the above questions honestly.
My wife and I bought our present home sixteen years ago in a market that was severely depressed. Money was extremely expensive but the house we are living in cost us one sixth of it's current value. She was much smarter about the potential of this house than I was. With any luck, you will have the same good fortune as we did. But even if you don't, buying a home is not for everyone. This handyman stuff has been quite the burden for me, and if you can't afford to hire it out, consider your skills at home repair.
But even after all is said and done, and you have come as far as closing the deal, the only words I can offer, is Congratulations. Enjoy your home.
|
