Education is Paramount for Cedar Rapids First Time Home Buyers

Buying a house in Cedar Rapids is not unlike a foreign language.  If you don't use the language, you lose it.  Buying a house has its own "foreign language" if you will, and if you don't take time to educate yourself about the process, you will find yourself frustrated and stressed out.  Nobody wants that!  The following is a top ten list of steps involved in buying a house in Cedar Rapids, Iowa. 

STEPS INVOLVED IN BUYING A HOUSE

1.            Determining with your family when you are actually ready to start the process.

2.            Contacting a Realtor (locally) who knows the market and can assist you with everything involved in the process of buying your first home or next home.

3.            Sitting down with a Realtor in the office (if you are out of town, obviously we can do this over the phone).  Coming into the office shows us YOUR level of commitment to get started in the process.  Also, we have access to all listings, paperwork, and tools to make this home buying process as smooth as possible.

4.            Making an appointment with a local lender.  This is very important!  The lender will take your social security numbers, W-2’s from the last two years, the last two paystubs, and run your credit score.  Based on that credit score you will be qualified for a certain dollar amount (for example $150,000)  Now, just because you are qualified for that amount and have great credit, it doesn’t mean that you can necessarily afford that house in your monthly budget.  We as Realtors work with our local lenders and YOU to determine what you can afford.  Then……

5.            We go shopping!!!!  We search our local MLS (Multiple Listing Service) for homes that fit your specific search criteria.  Let’s say you are looking for homes in Northeast and Northwest Cedar Rapids, ranch style, three bedrooms, one bath, with a two stall garage.  I go to our MLS and pull 15 properties that meet your search criteria.  If you are local in town, you drive by all of these homes and determine if you like or dislike the neighborhood that the home is in.  Then narrow down your list, give to us and we will set up private showings for you for the following homes.

6.            When we look at homes, we advise you to use the “SEVEN OUT OF TEN APPROACH.”  In other words, if a house you see has seven or eight out of the ten things you are looking for in a home, then you put it on your “short list” to either view again or write an offer.

7.            Once we have chosen your perfect home, we write an offer.  Generally to give you a guide, homes in the Cedar Rapids area generally sell for 97-98% of the asking price.  So if a home is listed at 100K, you can generally expect to pay 97-98K for this home.  Now, a buyer has about $3000 in closing costs that generally have to be paid at closing.  We always ask the seller to pay for these closing costs, so you don’t have to.  Keep in mind that if a seller views our offer on his house at 97K and has to pay your closing costs, expect to receive a “counter-offer” and more than likely they split the difference.  So they might come back with, “we accept your offer, except for the purchase price to be $98,500 with the seller paying your 3K in closing costs.

8.            Once an offer is accepted, we have contingencies that have to be met.  Contingencies are “small barriers” to the sale of the home that must be satisfied in order for the home to close on time (usually within a 30-40 day time frame).  Here are most of these contingencies:

a.            Financing:  Generally within ten days, your lender will make sure you are fully qualified to purchase this house

b.            Appraisal:  the house MUST appraise for what is being paid for it.  This appraisal is generally ordered and completed within ten days. 

c.             Insurance:  Within ten days of accepted offer, you must obtain homeowner’s insurance on the property.

d.            Whole House Inspection: Within ten days of accepted offer, we must arrange for a home inspection performed by a licensed inspector in the state of Iowa.  This person will make sure there are no major safety, mechanical, electrical, or structural issues that would compromise the sale of the home.  If the inspector does find safety issues or other potential problems, we go back to the seller and ask them to remedy.

e.            Termite Inspection: Performed within ten days of accepted offer, the termite inspector will make sure there is no ACTIVE infestation of termites on your property.  If there are, we ask the seller to pay for a termite remediation, which can generally run around $800.00.

f.             Final Inspection: A few days before closing and possession of your new home, we walk through the property to make sure that it is in the same shape and appearance as it was when we first walked through the property. 

g.            Closing and Possession: This generally takes place 30-40 days after accepted offer.  You will want to make sure you line up a moving company or friends with lots of pickup trucks to help you move.  You will attend the closing with your Realtor (that’s us) your lender, & the seller’s agent.  After closing which takes approximately one hour, you will receive the keys/garage door openers to your new home. 

9.            Your first payment on your new house will generally not be required for about thirty days.  Your lender will break down specifically what your principal, interest, insurance, and taxes are on the property, so you will know how much to budget for each and every month.

10.          That’s it!  You and your family are now proud owners of your first home.  Owning a home comes with a great sense of pride, but also responsibility.  You must budget for and anticipate future expenses down the road; perhaps a new roof, or countertops, carpet, etc., can all cost money and must be anticipated and saved for.  Every year, your house builds equity because the value of your house increases slightly every year.  We bought a house in 2004 for $196,000 and are now selling it in 2008 for $219,900.  The value of the house (or what a buyer is willing to pay for our house in today’s market) has gone up to this value.  Only a Realtor can determine what value your house is worth in today’s market. 

Hopefully, this will answer most of your questions, but certainly, if you have additional questions that is why we’re here.  We are nothing if we are not Real Estate School Teachers educating “big kids” on how to buy their first home!!!  Please trust us to earn your business and you will not be let down, ever!  Thank you!

Christopher Smith

Traditions Real Estate

www.christophersmithrealtor.com

Christopher.smith.realtor@gmail.com

319-329-5988

Licensed Realtor in the state of Iowa

“Success in real estate at the service of others”

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