How exciting is it to afford a new house after many years of hard work? It was only a dream to buy a new home, but now, individuals who could save money may afford to have their own dream house and property. One of everyone’s goals is to have a home of their own. However, there are too many things to consider before we decide if we will continue buying a house and lot for sale. Buying a house is very tedious and stressful, especially for first-time buyers. Getting through this process will be worth it and will save a lot of headaches in the future.
Listed on the Checklist Are Ten (10) Homebuyer Tips for Buying a House.
1. Commit yourself to a lot of document preparation and onsite inspections.
Being capable of buying a new home is a major life event for you. Dedicating time and effort to all the decisions needed in buying your first property or a new home is better. You will also need help from other professionals like a good real estate agent, broker, and house inspector. You can take advantage of the day off and holidays to work with the home buying process, such as meeting up with the seller and seeing the property by yourself by conducting a home inspection.
2. Only deal with titled houses and lots.
Many properties in the Philippines do not have a title, and it will be a burden in the long run if these untitled properties are bought. As a visualization, if you deal with untitled properties, home buyers will carry the burden of completing the chain of ownership up to the first owner. In this case, finding them and their contacts for a house and lot for sale with a longer list of previous owners will be a hassle. Only go for a titled house and lot for sale to save home buyers from these efforts.
3. Go for a house hunt with the help of a real estate agent.
This is when you will look for the home you always wanted. You can also check for the properties in that area and find the best in the current local market. Hiring a real estate agent will help make your house hunting more manageable, as they will filter all the houses they find based on your current needs and budget. Real estate agents can also check whether the house’s condition is worth buying. Establishing communication with the agent is the key to finding the right home for you.
4. Make sure the title is clean
The easiest way to verify the cleanliness of the title is to ask to directly ask the owner for a certified true copy (CTC) of the title issued from the Register of Deeds. A clean title should have an empty space under the second page of the tile under “Encumbrances.”
Sometimes, the technical description is not enough to fit on the first page and is continued under the ‘Encumbrances” page. It’s okay. Other listings included under this page, such as mortgages, might tell that the house has been mortgaged. It will be a deal breaker if the seller said that the title is “clean,” but the place is mortgaged.
5. Identify whether the seller is the real owner
To avoid complications in the home-buying process, it is better to talk directly to the owner. This is also the time that you can ask them anything about the house. What is the home’s improvement history? How long was this house built, and were there any major renovations? How old is the roof? Were any major disaster hits that affected the house and caused a major repair? What are the common natural disasters present in this area? Is the site located in a high-risk flood zone? How much are the homeowner’s association fees if it’s located in a subdivision? You will need to ask for a copy of their competitive proof of identity, such as government-issued IDs, for your future reference of the seller contact.
6. Verify the actual location of the house and lot
The property title does not provide the specific address of the house and lot for sale, and you will need the help of a third-party geodetic engineer or a surveyor in this process. Knowing your area’s boundaries will help you determine the limits until you can make home improvements.
7. Ensure that property taxes and homeowner’s monthly fees are updated
In reality, homeowners must pay their property taxes yearly and the homeowner’s monthly fee if the property is in a subdivision. You can easily ask the owner for the most recent receipts of their real estate tax payments and monthly expenses. Doing this will save you from the added cost of paying the lapsed charges that sometimes have penalty fees imposed due to not paying those responsibilities in time.
8. Check the house on-site
Of course, you need to visit the house and lot for sale you’ve chosen in person, along with the real estate agent, to make a preliminary home inspection. From here, you will determine the considerations needed before buying a house, like if you will consider a major renovation if you buy this house or add more health or safety hazards.
Another purpose of a house visit is to determine if the location is accessible to the main road and how busy traffic is from the road you’ll be going from there. It is an excellent time to introduce yourself to your future neighbors and learn how things work in their area.
Also, in this part, it is advisable to hire a third-party home inspector who is licensed and experienced in this matter. A home inspector will check on the following things related to the home’s condition, such as the structural integrity and whether the house will anticipate major repair. He also reviews the paint used as lead paint poses safety hazards for residents inside the house.
Overall, the purpose of this house visit is to check the house itself for other major hazards and simulate how your life would be with your neighbors in the future.
9. Negotiate with the owner
After all the checking and inspections, this is the time to make counteroffers with the seller to lower the home’s purchase price until you both agree to the final purchase agreement. This is also the best time to consult your hired real estate agent and inspector to determine the home issues to be presented to the seller. In this case, the seller could either lower the original home’s purchase price, or he will fix the presented issues before turning it to the buyer. There will be a lot of counteroffers and rejections at this stage. Be patient and let your team guide you through every decision-making process before the home purchase.
10. Explore mortgage options for down payment option
Realistically, most home buyers are only saving up for the home’s down payments, as buying a home is one of the most significant single investments everyone can buy. Applying for a home loan is the most practical option for most people, as loan companies will let you borrow money to pay for the house. However, you’ll pay them later with an agreed interest rate and some loan fees within the prescribed time.
Some tips for first-time buyers are the higher your down payments, the lesser the interest rate will be.
Loan companies, in general, only let you borrow their money to you quickly with background checking. They will ask for your monthly income based on how much cash they will give you that you can pay in a fixed number of years. You will also tell them the home price you’re planning to buy. By telling them, they can help you create a flexible mortgage payment arrangement that entirely fits your monthly earnings.
Part of their background checking is also your credit score. It is fine when you are paying your debts promptly, except when you have lapsed, and some bounced checks, it will be harder for you to be accepted for a loan.
There two major systems used for home loans which are conventional loans and the other is through Federal Housing Administration. The country’s current style of loaning is still with the conventional loan system, where the loan officer has stricter loaning standards and higher down payment requirements.
In the USA, FHA loans have more lenient loaning standards. Also, FHA loans have a lower down payment requirement than the conventional system still widely used in our country.
The lending company can still give you monthly payments that fit your monthly budget.
Some renovations and loan installations might be left after acquiring your new home. This is a long-term commitment you need to be prepared for, but the good news is you could get over the wall by procuring a new home.
This house-hunting guide should help anyone interested in buying a house, may it be a first-time buyer or an individual who already has many properties. If there are important things that weren’t mentioned above, staying connected to a good real estate agent will always be the best solution.
Read more: Signs to Look for Before Investing in a Home: Red Flags That Could Cost You Money and Sanity
