Many people think that buying a home is a simple as finding a home they like.  It's not quite that simple, but it can be fun and adventurous.

    My advice:  start with the basics.  Take a good look at your credit situation...good and bad.  If you have several open accounts with zero balances and you don't plan to use the accounts again, cancel them in writing.  Those accounts will appear as potential debt to the lender.  However, if you have a long-standing account, keep it!   The longer an account has been open and in good standing, the better it is for your credit rating.   If you know you have a flaw in your credit, even dating back several years, correct the problem if possible.  If it cannot be corrected, write a letter of explanation for your lender's file.

    Make an appointment with a reputable bank or mortgage company to determine what price home and payment amount you can qualify for.  I can recommend several who have given exceptional service over the years.

    There are several factors involved in the "pre-qualifying" process, but these are the main ones:

      1.  Your gross annual (declared) income.

      2.  Your debt ratios.

      3.  Your credit history.   The more recent the problem, the more serious.

      4.  Your job or career history.

     A rule of thumb for conventional loans is that your total house payment, including taxes and insurance, should equal no more than 28% of your gross monthly income.   This is called your "front" ratio.  Your total debts, including your house payment plus any fixed monthly expenses such as credit cards, student loans, installment loans, and child support, should equal no more than 36% of your gross monthly income.  FHA and VA have slightly higher allowable ratios.

     DON'T MAKE ANY MAJOR PURCHASES OR OPEN ANY NEW LINES OF CREDIT  DURING THIS TIME!

    Of course, your downpayment will be considered in figuring your monthly house payment and your debt ratios.  Once you know how much house you can buy, you'll have to decide how much house you want to buy!  You'll find more detailed information and recommended lenders in the FINANCING  section.

     The next step is to decide on your priorities, and you're probably one step ahead of me! Your biggest priority may be area.  If you currently own or rent a home your priorities may be based on what you don't have now!  If your priorities are location and features, you may find yourself having to compromise to stay within your budget.

     I can help by searching the multiple listing services for just the right home in the right location for the right price, guiding you through contract negotiations, home inspections, and closing.  My highest goal is to see you happily settled in your new home, enjoying the emotional and financial benefits of your home.  Please don't hesitate to let me know if I can answer any of your questions or concerns along the way.

Step Two:   Hire A Buyer's Agent

    You don't have to go it alone.   With any home listed in multiple listings, the listing broker has agreed to share commission with the selling broker.  That means that as a buyer, you can have the benefits of professional representation through your home search, loan approval, contract negotiations, home inspection, walk-through and closing at no cost to you!

    It's important to have a good match, so look for an agent who has experience and knows the housing market in your area and price range. 

     If possible, it's always a good idea to meet your agent for the first time at the real estate office to get acquainted,  review your conditions and priorities, your time line, and look at available properties.  If that's not possible, the Internet offers the opportunity to get swap ideas and information with your agent.  

Step Three:  The Search

    When it comes to looking for a home in Atlanta, there are a lot of resources:  real estate guides and magazines, newspaper ads, the Internet.  Unfortunately, the "shelf life" is pretty long on all print advertising, and the home you fall in love with in the magazine may already be sold.  It is sometimes difficult to determine where the home is located, how old it is, and sometimes even the price.

     It can be helpful to me if you find a home that appeals to you in its appearance or description...it helps me to understand not  only your search criteria, but your "hot buttons", and I can be on the look out for those key features.

    A serious search should begin with your describing to me what features are absolutely necessary...we call this a "condition to buy".  This will include your price range and location, and it may also  include the number or configuration of the bedrooms , full basement, private wooded lot (or smaller lot if you hate yardwork), brick or stucco.

    Then we'll want to discuss your preferences.  You may consider a home in Duluth or Roswell, but you prefer a home in Alpharetta.  Or, you may consider a brick home but you prefer stucco.  Do you prefer a newer home?  Open or more traditional plan?  A swim-tennis community?

    At this point I will begin my search of the areas you are considering, beginning with your preferred area(s).  I will search AREA, ACTIVE (only active listings...not under/contracts), PRICE RANGE, and any of your conditions for purchase, which may include number of bedrooms, age, basement, lot size, etc.

    All active listings which fit your criteria will come up.  If there are many from which to chose, I will "weed out" any homes which do not meet your preferences...then we'll be left with a selection of homes in your area and price range which are good candidates.   If I am not finding a large selection of homes in your area that meet your criteria, I will leave them in the search.

    If you find a home in a real estate ad and it does not show on the computer, it means that it is either out of your search area, out of your search price range, did not meet your criteria, or it is no longer an active listing.  If meets your criteria and does not come up in the search it is not available.

    On the other hand, the market is very active in Atlanta, and we may find the home of your dreams under Active Listings, and it may have just gone to contract.  It does take about 48 hours to update the system.    Because the market changes every day, I suggest that you seriously consider all of the homes included in the initial search.  If you find one that meets your criteria, and you love the home...BUY IT!

    After your first day of your search, which is based on available homes that meet your criteria, you should have a very realistic idea of what is available in your search area in your price range.  If you're not finding anything that meets your expectations, you may need to expand your search to include other areas or price ranges.   If there is a home out their that fits your criteria, you will see it...I promise!

Browsing The Internet

   You can do some preliminary searching for available homes at GAMLS , or I can set up your own Client Gateway at FMLS based on your preferences, and it will automatically check for new listings every night.     

    Metro Atlanta's housing market is very reasonable compared to many cities.  However,  I must caution that you probably will not find a single family  home in the neighborhood of your dreams for under $160,000.  That was ten years ago (and why there is a proliferation of new townhome communities popping up all over the suburbs).

     If you find a modest priced home in a stable, thriving neighborhood, I can promise that there is something "not-so-perfect" about the house. It may mean that it just needs redecorating or updating.  It may be an older house with  a floor plan that just doesn't work well for modern lifestyles. It may be that the overall condition is poor. That doesn't mean that you should not consider it, you just need to make informed decisions based on what you can change, fix, or live with.

     If you find a beautiful single family home in great condition in Gwinnett County for $150,000, it probably is a very small, starter home or in an area that is not in high demand.  Think a lot about this for your own future enjoyment of your home and neighborhood and for resale value down the road.

OTHER ADVICE ABOUT SEARCHING ON THE INTERNET.  

    Your parents probably told you not to "judge a book by its cover," and your parents were right.  If there is no photograph, it probably is a new listing - check again in a few days.  If there is only a photograph of the front of the house but no interior photos, it may be because the interior doesn't show well (which may just be decorating), or a listing agent who is not tech savvy.   If the photographs are bad,  it's not necessarily the home's fault.  It may just be a bad photographer, a bad weather day, or a home that's difficult to photograph because of surrounding trees.  If it's a good neighborhood and has the price and features you're seeking, don't rule it out without seeing it in person!

     Also, be careful about searching zip codes, as one zip code may include a wide range of neighborhoods and school districts.  Do your homework, and make informed decisions.

Step Four:   A Word About Offers

  At the time of the offer, you will be expected to put up earnest money in the form of a check.  This amount will vary, but approximately 1% of the offer price  is typical for an average resale home, and it will count toward your downpayment at closing. The earnest money will be held in an escrow account by the selling broker (RE/MAX Northeast), or in the case of a new home, it may be held by the builder.

    We're conditioned by financial experts and the media not to pay the asking price, but to "make an offer".  There's nothing wrong with making an offer.  Although your first offer may not be accepted as written, it often opens the door to negotiation and contract.   However, before you make an offer, keep the following in mind:

     If you find the home of your dreams and make an offer lower than list price, you risk losing the home to another buyer.  An offer is not a contract.  The seller may "counter" your original offer.  Until there is a meeting of the minds between buyer and seller, there is no contract.  The seller is free to consider and accept another offer.

     If you're looking at new homes, the builder probably will not be willing to accept a price much lower than the list price.  With construction costs on the rise, builders' profits are diminishing (most residential builders are lucky to realize a 10% profit on their homes).   Many builders do not negotiate price at all.   Don't take it personally...it usually means the community is in demand, which means greater value for you.

Step Five:  The Inspections

   If you are purchasing a new home, it will have undergone many inspections prior to closing.  County inspectors will have inspected it at various stages of construction.  Upon completion the county will issue a Certificate of Occupancy, indicating that the home has been built according to current building codes and is ready for occupancy.  Your lender will also do a final inspection to insure that the home has been completed according to the terms of the Purchase Agreement.

    Whether the home you are purchasing is a new home or a resale home, my recommendation is to hire an independent home inspector and a pest control company for a termite inspection.  The fees are determined by the size of the home and usually range from $350-$450.  Your Purchase Agreement allows you a certain amount of time (agreed upon by buyer and seller)  to have your inspections done and to submit to the Seller an amendment to the Purchase Agreement, requesting any repairs to be completed prior to closing.  A note here:  the inspection creates a contingency to the contract.  Both Buyer and Seller must agree on repairs to be completed by the Seller.  If the parties cannot come to an agreement during the time allowed by the Purchase Agreement, the contract becomes null and void, and earnest money is refunded to you, the Buyer.

  The inspection contingency does not provide for cosmetic items, but safety or structural problems and code violations (at the time the home was built or the item added - resale homes are "grandfathered" for code changes since the home was built). 

     If the seller agrees to perform all corrections requested by the buyer, the contingency is removed from the contract.  In a normal inspection contingency, with the "right to request repairs,"  the buyer does not have to option to terminate a purchase agreement simply because the inspection is not satisfactory.   There are the options of buying "as is," or with the right to terminate based on the inspections.  All parties must agree to the inspection clause as part of the Purchase and Sale Agreement.

Step Six:   The Appraisal

     Your agent should check comparable sales in the neighborhood and surrounding area before you make an offer to purchase, but no matter what the buyer and seller agree upon, the lender will rely on an appraiser to determine the value of the property.  The loan is based on the value of the property, not the selling price.

     Typically, the appraisal is not ordered until the inspection contingencies have been removed.  If you or your agent has any doubts about the property appraising for the sale price, it may be addressed in Special Stipulations in the offer. 

• Agency Relationships
• Choosing an Agent
• Relocating to Atlanta
  
• Financing
• Home Inspections
• Termites
• Closing Costs
• Owner's Title Insurance
  
• Lease Purchases
• Gwinnett Information
• Fulton Information
• Links to Other Helpful Information