Preparing to buy your first home


Preparing to buy your first home

...key steps to watch and manage

Observer writer

Sunday, August 25, 2019

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For most people, the thought of buying a home can be exciting and terrifying at the same time, and not simply because it is likely the largest financial obligation you will ever make, next to having children.

It involves meticulous planning, saving, and enough paperwork to make even the boldest among us cower in dread but with good information and proper guidance, the process to owning your dream home can be tolerable, if not pleasant.

876 Listings reached out to the experts, Dawn Ruddock, realtor and broker associate; and realtor associate Lystra Sharp at Coldwell Banker Jamaica Realty to assist with simplifying the process.

When looking for a house, shopping for a mortgage is perhaps the most important thing to note, as this will inform what you can realistically afford to put down for an offer.

“These days, interest rates are lower and the competition among lending institutions means that the buyer can get competitive rates and terms,” Sharp said.

“Shop around and see which option is best for you. You may want to reach out to an accessible mortgage broker who can assist you in this regard,” she advised, “In addition to the competitive rate and terms, the mortgage institution must have in place a system for continuity [so] that your transaction will continue to be processed in the absence of the mortgage specialist handling your account.”

Additionally, saving for a down payment is very important and can be very costly, as it is calculated as a percentage of the cost of the property. Do not misjudge how much you may need to save as the closing costs for purchase can also run pretty high.

Ruddock recommends that “you should plan for a 10% down payment. It could be less and is dependent on the seller. With the reduction in the rate of the transfer tax and stamp duty, there is a bit of flexibility on the part of the seller in requesting the percentage down payment.”

With homeownership being such a big investment, many people hunt real estate with the aim of staying well within budget, as they operate with razor-thin margins for errors.

“With the help of your realtor skilfully negotiating for you and also hopefully purchasing a property that requires little to no renovations, then this should go a long way in your staying within budget,' Sharp added.

Holding out for improved rates or a better environment under which to buy a home is not usually recommended, given the unpredictability of the market. Sharp said, “The time to buy is always now, as property prices here are always climbing; however, when interest rates are low and when the market is deemed a buyer's market may be a good time to purchase” she clarified that a buyer's market is one where “there are more houses for sale than needed by buyers, the houses are on the market longer, buyers have more to choose from and can possibly have more room for negotiation”.

It is generally best to buy when you are thinking long-term, Ruddock said. “However, your reason for buying, your overall plan, and age will also factor into how long you hold on to the property.”

Having weighed your options and decided to make an offer, there is a lot of technical input that goes into finalising purchase. Negotiations will likely take place, as few people will offer what is asked or accept what is first offered, to be followed by the requisite home inspections and evaluations to ensure due diligence is done. Though a seemingly unnerving process, many of these requirements may be facilitated by the real estate agent, who tries to make the process seamless and your experience smooth. Happy hunting!

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