Lake Tahoe Real Estate Blog | Tahoe Homes, Real Estate & Properties.

Lake Tahoe Real Estate Blog

RSS

South Lake Tahoe, CA Market Statistics

Stateline, NV Market Statistics

Lake Tahoe Blog iPod

Shuffle Show
Our Bolero Button

Stat Counter

First Time Home Buyers in South Lake Tahoe: Step Five

November 19th, 2009 categories: First Time Home Buyers, For Buyers, For Sellers, Lake Tahoe Real Estate, South Lake Tahoe, CA, Stateline, NV

How Much $$$ Do I Need to Buy a House.

This is inspired by a colleague and friend of ours, Rich Jacobson , who owns the Kitsap County Real Estate Blog in Washington state. His work for the source of this series is superb, and with his graces we are retooling it for first time home buyers in our South Lake Tahoe real estate market.

This then is the fifth in a series of articles focused on helping 1st Time Home Buyers successfully buy a house in South Lake Tahoe. Each time, we’ll focus on key events, or steps if you will, in the South Lake Tahoe home buying process.

1. In the first of these, we talked about Mortgage Lenders and Loan Pre-Approval.
2. In the second article we talked about the first five of the top ten traits to look for in finding A Great Real Estate Agent ( Pt 1).
3. In the third article we discussed the second five of the top ten trails to look for in finding A Great Real Estate Agent (Pt 2).
4. In the fourth article we looked at the initial meeting with your agent and Exchanging Vows: The Buyer Agency Agreement.

Step Five: What does it costs to Buy My First Home?

We are frequently asked by 1st Time Buyers is, “what are my out-of-pocket expenses? There are many loan programs that require very little, if any, outlay of cash. There are, however, a few of instances that will require some “hard cash” to succeed in your purchasing goals. Generally this is much less than what you might think.

Depending on your loan product (the type of loan that’s best for you), you may need some money at closing to cover your loan expenses. In some cases, you may be able to negotiate with the Seller to pay a portion of your closing costs. Here in South Lake Tahoe, the closing costs are normally split 50 -50 between buyer and seller.

As we discussed in the first article in this series (here), it is your Mortgage Specialist who will provide you and your real estate agent with an estimate of what your closing costs will be. Together, you and your agent can then develop a successful purchasing strategy based on that information.

There are typically two additional expenses in a real estate transaction – your earnest money deposit and the home inspection.

EARNEST MONEY (The Deposit)

Earnest money accomplishes a number of things:

1) It documents your serious intention to purchase the property.

2) It can demonstrate your financial ability to satisfy the contract.

3) It can strengthen your negotiating position as a solid, qualified buyer.

4) It provides remedial damages for the Seller in the event that you breach the contract (backing out of the contract for a reason not stipulated in the contract – your contract will limit that exposure however).

The actual amount of the earnest money deposit is not set in stone. There is no set formula, or percentage that establishes it. The deposit varies throughout a market, and we normally recommend a deposit based on the particular property to be purchased.

If one is involved in a competitive, multiple-offer transaction, a higher deposit can make the difference in yours being the successful offer. When your offer is accepted, your deposit is placed in a trust account with the escrow/title company, either immediately or within a day or two after acceptance..

At closing, this deposit money is applies to the overall cost of purchasing your house.

THE HOME INSPECTION

The smartest money you spend in the home purchase process is for your home inspection. A top of the line home inspector is worth every penny you pay him. The cost is normally in the $300 range for a market entry to mid-market house, and we will provide you with recommendations for the best home inspector possible or your situation.

Inspection requirements vary from state-to-state, but most involve a complete inspection and assessment of all structural, mechanical, electrical, and plumbing systems/components. In some states, a pest inspection is included as part of the home inspection, or is conducted and paid for separately (which is the case in South Lake Tahoe).

A thorough home inspection usually takes 2-4 to complete, depending on the size of the home. Upon completion the home inspector will usually provide the inspection report to you and your agent via email, complete with an itemized list, and photographs, of any and all issues to be addressed about the home.

Sometimes there are none, but most often the home and/or pest inspection reports reveal a few minor issues that should be addressed, or repaired, prior to closing. This normally requires a discussion, or mini-negotiation if you will, to determine how much the seller will pay for said repairs (sometimes it’s all of it, sometimes some of it, that depends on the issues and situation involved).

The more informed you are, the better positioned you will be to successfully achieve Your 1st Time Home Buying Adventure!

The first post in this series, Mortgage Lenders and Loan Pre-Approval here.
The second in this series, Get a Great Agent (pt 1) here.
The third in this series, Get a Great Agent (pt 2) here.
The fourth in this series, Exchanging Vows: The Buyer Agency Agreement here.
The next article in this series, Let the Home Tour Begin here.