Are you looking at buying a home in this market right now? We already know what you’re going to say… It’s impossible. We sympathize with every first-time homebuyer right now. It is a whirlwind of emotions that has left us all feeling fatigued about purchasing a home. The truth is if you’re looking to buy a house in this market it is challenging. There are constant bidding wars, offer presentations on nearly every home that is being listed and then there are the conditions that go along with any offer.
The first thing we want to say is that it is always beneficial to work with a licensed agent. The best part is that if you’re buying a house, there is no cost to you! That’s right! As a buyer representative, we are paid from the sale of the home that you purchase. So, before you start calculating the costs of working with a professional, keep that in mind. Secondly, whoever you choose to work with, it is important to trust them and have a good relationship with them. We cannot stress this enough. If the trust has fallen apart, you will always have regret and remorse about anything you do.
If you’ve been in the market for a while, chances are you know about the conditions when you’re considering buying a home. What are the conditions for and why do we have them?
Conditions are there to protect you as a buyer. These conditions are typically things such as property inspections, buyer financing, status certificate, etc. To this, we are going to focus on buyer financing and property inspections. Those are the main two that you will likely have encountered several times already.
Property inspections provide you with the opportunity to have a professional, property inspector, come in and look thoroughly at the property. This will make you aware of any potential problems that you may not have noticed or stuff that is hidden. If there are issues that are found, it gives you the opportunity to decide as to whether you would like to move forward with the purchase of the property or seek a price reduction.
What is the buyer financing condition? This is a condition that allows you to confirm whether you have been able to obtain the mortgage financing once all the relevant information and assessments are received. Before we continue, if you are looking at purchasing a home, we always suggest meeting with mortgage brokers or banks to start your pre-approval process. This will not only help you in the long run, but it will help all of us to make sure you’re looking at properties that you can afford. The market is hot right now and the majority of the properties are facing multiple offer scenarios.
So, how does this affect you? Well, if you put in an offer for a property and it is more than what the bank appraisal comes back with, then you will be on the hook for making up the difference. A mortgage will only be approved on what the appraiser says the home is worth. Without this condition, you would be on the hook to make up the difference for the property you purchased.
By now, you’re probably asking yourself what does all this mean and how do I know what to do?
The truth is, there is no right answer. We can say that you should be working with someone with whom you can have an open and honest conversation about this. A lot of it comes down to risk and we all have different risk tolerances. Making an informed decision that is best for you may not be best for someone else.
If you have a question about the home buying process, we are here to help! We truly believe in helping people and not only in purchasing a home but through the entire process. After all, it is one of the biggest financial decisions you’re going to make. Feel free to contact us anytime!