How to buy a home – the simple version!
So the question – how to buy a home – gets brought up often. Buying a home is not like buying a bag of skittles; the process is, beleive it or not, quite a bit different! Though it’s not rocket science by any stretch of the imagination, buying a home can be unique, and quite possibly – intimidating. Buying a home in Delaware shares many similarities with the purchase process in most other states, so feel free to use the following as a template for the overall process anywhere. Please understand, however, to buy a home in Delaware — you may very well experience a slightly different process than where you’re coming from.
Overall, the process to buy a home in Delaware is not that difficult (easy for me to say!), but please consult your Realtor for the most accurate advice – specific to your situation – when you’re ready to begin YOUR process.
With that out of the way: There are a number of steps that may (or may not) occur during your Delaware home buying process. Based on my expertise (and experience), the following can be used as an easy to interpret set of guidelines for a typical home purchase; you asked the question – How to buy a home? – so let’s get down to business…
How to buy a home in Delaware, step 1 – Get pre-approved:
Unless you’re buying a Delaware home with cash – sellers will expect you to have “proof” of financial worth/ability. And technically – even if your offer is going to be all cash – sellers will still want to see proof of funds. You will need to contact a lender (bank, mortgage broker, credit union, etc.) to get a “pre-approval” letter; and in the case of an all cash offer – you will need to show bank/financial statements showing that you control the funds necessary to follow through with such a purchase. A pre-approval letter is essentially a statement – from an entity willing to lend you money – that validates your ability to buy a home in Delaware, within the price range you’re seeking. It gives the seller peace of mind, and confidence in negotiating with you. It will also give you confidence in the price range you’re actually seeking to buy. I’ve had buyers assume they were in the $400-450k range, only to find out that unique circumstances allowed for a loan of no more than $250k. I’ve also had buyers who assumed they could afford far less than the bank ultimately approved them for. Moral of the story? Get pre-approved by a financial professional before you search for Delaware homes. Click here for pre-approval (and for a seamless transaction – tell him I sent you).
How to buy a home in Delaware, step 2 – Find homes in Delaware worth consideration:
During your search for homes in Delaware, I can get you into homes for viewing, and even recommend possibilities that you may not be currently thinking about. I can also point out features, or flaws, that may make, or break, your interest in a particular Delaware home. The list you come up with can originate from a number of sources, but I find that the local MLS is always the most accurate (far more accurate than sites like Zillow/Trulia, and the sort). I have access to the local MLS, and will search WITH YOU to find homes worth taking a look at. You can find accurate searches for homes in Delaware without me (i.e.: on my websites linked to the MLS), search in my office beside me, and/or any combination of the two! I also have an app that will blow your mind! Really – You will have direct access to the local MLS (at your fingertips) no matter where you go; just ask me about it (or click here from your mobile device), and I’ll make it happen… Regardless of what tool you use to find your home in Delaware – I will ultimately have to get us in for viewing. So send me a quick text/email – with an brief introduction and list of needs – so I know what you’re looking for, and can prepare in advance for helping you most efficiently!
How to buy a home in Delaware, step 3 – Write an offer to buy a home in Delaware:
How much will you offer, and why? Are you going to offer fair market value, because the property justifies it? Or will you “low-ball,” because there are “lots” of “fixes” to be made? How does the property stack up to the competition? Is this a “distressed” property (i.e.: short-sale or REO)? Is the seller “motivated,” or are they just ‘testing’ the waters? Together we will find the best negotiation strategy for your offer. There are tell-tale signs to interpret the most probable psychology of a seller, and I will help you leverage these signs to your favor. I also have a number of ‘behind-the-scenes’ sources that I extract data from, and can assure you that my sales comparison approach will provide a legitimate range for the property’s value (and hence – the range you should feel comfortable offering in). Oh, and before I forget: you will be expected to put forth an “earnest money deposit.” This is simply “proof” to the seller – in the form of cash/check – that you’re serious about wanting to purchase the Delaware home you’re making an offer on. I’ve seen earnest deposits as low as $1,000, and as high as $40,000… ‘They’ say 4-5% is “typical,” but in all honesty – It all depends on the circumstances.
How to buy a home in Delaware, step 4 – Inspect your future Delaware home:
You will hire an inspector to the evaluate this Delaware home from top to bottom. This inspection will cost a couple (maybe a few) hundred dollars, depending on the company you hire, and the amount of ‘inspecting’ they do. We want a second set of eyes; a set of eyes that will go on record – documenting anything that may ‘make,’ or ‘break,’ the deal. The reality is this: we (you and I) are not experts in home construction, HVAC, mold, pests, etc., so we let the people who are experts give us their professional opinion as to the condition of the property. Hopefully all goes well — but if something ‘pops’ up, that
we weren’t expecting (i.e.: termites, foundation issues, HVAC issues, roof problems, etc.), we now have leverage (or maybe not) for extended negotiations. The reality is this: inspectors are paid to find problems, so there is a VERY good chance that your inspector will find at least a few. Our hope is that there are no “major” issues; we can live with the minor stuff… Real estate deals are dynamic situations. There’s nothing “static” about searching for homes in Delaware; or even buying homes in Delaware for that matter; and the inspection process is a piece of the dynamic home buying process puzzle.
How to buy a home in Delaware, step 5 – Re-inspect:
Once an agreement, stemming from the results of the inspection, has been made – and one to two days before closing – we will re-inspect the property to ensure any “flaws”, and/or agreements, were mediated.
How to buy a home in Delaware, step 6 – Attorneys (mandatory to buy a home in Delaware):
We may be able to handle your search for homes in Delaware, but we are not lawyers — and Delaware is an “attorney” state. This means that ALL real estate transactions in Delaware MUST be facilitated by an attorney. Your attorney will ensure acceptable title of the property, provide (sell) you with title insurance (just in case), and make sure that all of your legal rights are met. Most of the charges associated with your attorney will be due at settlement. Different attorneys have different rates, so the best thing to do is pick up the phone and ask how much. No worries! I think the word “attorney” scares a lot of people, especially due to perceived/assumed costs associated with hiring them. Believe me – your real estate attorney is not only worth every penny paid, but not very costly at all. In most cases, you can expect to pay a total of between 3-5% for “settlement fees”; this includes the cost of your attorney, and any fees charged by your lender to get the money where it needs to be. In all, I think the total closing costs (percentage based) are similar in Delaware to most other states; and yes – to include the cost of your attorney! Just an FYI: your attorney’s job is to check for encumbrances, title issues, liens, etc… ANYTHING that could get in the way of a seamless transaction – your attorney will find; or so we hope. Believe me – the funds necessary to pay attorney fees is money well spent. And since we’re on the topic of insurance: it is also a good idea to explore the concept of warranties prior to buying your Delaware home…
How to buy a home in Delaware, step 7 – Lender pays the bill:
There are a few things that will typically happen before the bank will wire the money necessary for your purchase to become a reality: 1) They may want to ‘survey’ the property; to make sure the property boundaries are where everybody expects them to be. 2) They will mandate an appraisal (that you will pay for); to validate loan to value ratios and ensure your offer is inline with “fair market value.” 3) They will perform final checks on your credit “viability” (i.e.- your ability to repay the note), and ensure that you meet whatever federal/state/municipal/business guidelines necessary for the loan to close. People tend to refer to this loan as a “mortgage,” though a mortgage is technically a lien, not an actual loan); we can discuss semantics later… 4) You will be expected to bring a certified check to the settlement table. Depending on your loan product, this amount can vary significantly (check with your lender!)… The total will include both your down payment, in addition to settlement costs (which again will probably range from 3-5%). Did I mention that you should maintain consistent, and transparent, communication with your lender??? You should! If you want to buy a home in Delaware, your best friends are your Realtor, and your lender!!!
How to buy a home in Delaware, Step 8 – Keys
If all goes as expected, you will get keys on the day of closing. Queue the music: The seller will slide the keys across the table in dramatic fashion… Your eyes will light up, and reality will sink in – you’re about to claim possession of your very own Delaware home! Reach for them…yes, the keys….the home is now yours! Okay, maybe – less dramatically – your attorney will perform key transfer duties… Either way, on this miraculous day, you will own the Delaware home that you’ve been
waiting for weeks/months to take possession of! Congratulations; you are now, officially, a Delaware homeowner! And maybe I should have made a bullet point for this before “keys,” but you will need to transfer utilities, change your official address (and stuff like that), ideally, before physically taking possession of your new Delaware home!
How to buy a home in Delaware, Step 9 – After the sale:
I will expect the greatest review of all time (Realtor.com, Zillow, Facebook, yelp, etc.). My business (the food on my table) depends on referrals from satisfied clients like you! Thank you for your business, thank you for your friendship, and thank you for referring your friends, family, and loved ones to your most reliable source for all things real estate! And thank you for coming back to me when you’re ready to sell, and begin the process of buying, all over again! Oh — and don’t forget — You still have to move in! I can provide you with a list of service providers to get you started — just ask!
And there you have it! The basic guide of: how to buy a home in Delaware…
As always, feel free to reach out with ANY questions or needs!