Hey First Time Home Buyer! I am super excited that you guys have started to explore the idea of home ownership. The home buying process can be complicated; there are many things to consider and significant decisions to be made. As a first-time home buyer, the information can be overwhelming and the nerves of making such a big financial commitment can be distracting. You can certainly help to ease the anxiety by using all of the resources available to you. Your primary help will be your REALTOR, but there are other people that will help you to navigate the path to home ownership.
Lender – Is the bank or mortgage broker that will provide the funding (loan) for your home. Lenders will offer a variety of products and each will have their own restrictions and risks. The typical mortgage is a conventional, fix rate mortgage but there are others that may be more favorable based on your financial situation. The key factors that impact your eligibility for a loan are the levels of income, debt, and credit. Fees associated with lenders can cover loan applications, credit checks and appraisals. You can expect to pay approximately $1000-$1500 in fees to the lender. Many of these are paid at closing, but don’t be surprised if you are asked to cover some costs upfront.
Inspectors – Are the companies that will help to determine the overall condition of the house you wish to buy. There are many inspections that you can choose from (water, septic, radon, pool, termite etc.) The most commonly requested is the home inspection, others are either unnecessary or selected for your own peace of mind. These inspections are for your knowledge and should help to uncover any minor and major defects in the home. Your REALTOR will assist you in working through any issues/concerns and sharing those with the seller’s representative. You can expect to pay approximately $400 – $1500 for a home inspection depending on what you decide to have completed.
Attorneys – Delaware is an Attorney state, meaning the responsibilities related to settlement are handled by an attorney that you hire. It will be there responsibility to ensure that the legal requirements for the purchase are met. They will prepare the necessary documents and coordinate with the other parties involved with the transaction. They will investigate and make you aware of any concerns so they may be resolved before the day of settlement. It is important to note that the attorney is working for you, they are your advocate and a primary resource for information about the transfer of real estate. Estimated attorney fees range from $700-$1000 which will typically include title work, deed recording and processing fees.
Insurance Agent – Your lender will want to see that you have secured property insurance on the home you want to buy. Usually the best place to start is the current provider for your rental property. If you are not living in a rental property, then you might ask a family/friends or look to your REALTOR for some guidance. The home insurance premium can vary greatly based on the house features and location. On average, you can expect to pay between $500-$1000 a year in property insurance.
Each of these people are adding a piece to your first home puzzle. They are there to provide support and play a valuable role in helping you feel confident about the things that need to be done. I cannot stress enough the importance of partnering with a REALTOR who will be vital in coordinating all the various services and guiding you along the way. Most REALTORS already have these industry connections and will be able to offer names of reputable service providers for you to consider. Think of them as part of your home buying team. Each has their own responsibility and collectively they are working to achieve your home ownership goal!