Buying your home

Buying Your Home

Once you’ve found a home you want to buy, you will be ready to make an offer. Your Las Cruces Team will help you prepare a purchase agreement and submit it to the seller. The seller, and you as the buyer, can make counter offers until a final price and conditions of sale are agreed upon. During these negotiations, you and the seller will also decide upon a period in which to close the sale. During the closing period, typically 30-90 days, you and the seller will have time to complete home inspections and make agreed upon repairs to the home. Your closing date is the day you and the seller will sign final documents transferring ownership. At that time, you’ll receive the keys to your new home!

Negotiating a Purchase Agreement

Buying a home requires solid negotiation. Successful negotiation is more than luck or natural talent. It requires the learned ability to use certain skills and techniques to bring about win-win results for the homebuyer and seller. Your Las Cruces Team is exceptionally knowledgable in professional negotiation.

Understanding Home Inspections

It is recommended that you pay for a home inspection before you buy the home. You should make the purchase contingent on a satisfactory inspection. Home inspectors will evaluate the structural aspects and certain mechanical systems of the home. They primarily inspect the foundation, roof, plumbing, electrical, and heating and cooling systems. But, services vary widely, so be sure to communicate just how thorough an inspection you want. The more detailed the inspection, the more costly the service. Always seek out a qualified and licensed home inspector with a solid reputation for standing behind his or her work. Any warranties offered should be given to you in writing. Also ask about having the home inspected for termites, radon, or other potential environmental hazards. The buyer usually pays the cost of inspections.

Understanding Homeowner's Insurance

You will be required to secure homeowner’s insurance before closing on your mortgage loan. It is important to purchase a homeowner’s insurance policy that fits your particular needs. When you shop around, you’ll want to ask for replacement cost coverage insurance. This insures your home’s replacement cost, not its market value. The market value may be higher or lower than the cost to rebuild your home. With replacement cost coverage, you can rebuild your home on the same lot at current local construction costs if it is destroyed.

Companies use various methods to determine the estimated replacement cost of your home. Be prepared to answer questions about your home’s square footage, number of bedrooms, and number of bathrooms. Inform your insurance agent of any custom features that are part of the dwelling.

When considering replacement cost coverage, be sure to deduct the value of the land, foundations that are below the surface of the ground, and other items such as landscaping and lawn sprinkler systems. If a loss does occur, the insurance will cover the cost to replace the actual structures on your property.

Household contents are only covered for their actual cash value. Actual cash value is the replacement cost minus depreciation. You can buy replacement cost coverage for your possessions as a policy add-on, or endorsement. A homeowner’s policy also offers very limited coverage for valuables like jewelry, furs, cash, and stamp or coin collections. You can buy separate endorsements to cover these items, but doing so will significantly increase your premium. You may also be required to have such items professionally appraised, at your expense.

Closing on Your Loan and Good Faith Estimate

Within three days of receiving your completed mortgage loan application, your mortgage lender is required by federal law to provide you with a Good Faith Estimate of the fees and other costs associated with the mortgage loan. These costs, known as Settlement Costs, cover every expense associated with your transaction. Items such as inspections, title insurance, taxes, credit report, etc., will all be disclosed to you in writing. Closing costs can vary, but usually range anywhere from 3 to 5 percent of the sales price. Make sure you understand and agree to any costs disclosed to you. Always ask questions if a fee seems unnecessary or excessive.

In addition to your down payment, which is your investment in the house, you will be required to pay certain closing costs on the transaction.

Move to Step 8 of the home buying process

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