When buying a home, the seller will likely expect you to haggle over the asking price. Most sellers overprice their homes to allow for negotiation. Negotiating may seem intimidating, but understanding what to anticipate will help. Search for your new home with a REALTOR®. Many purchasers assume they no longer need an agent since online listings are so accessible. However, an agent does more than you may think. Your REALTOR® will also negotiate the price of your house and help you decide how much to offer. Real estate agents are local market specialists. They know how interest rates fluctuate, which properties will appreciate, and how much the property taxes are. They also remove their emotions from the property buying process, and they advocate for your best interests. Your real estate agent will also write the best possible offer, with all the contingencies you need to protect yourself. Contact Illinois Star REALTORS® before you start looking for a house.

When looking at homes, your REALTOR® will advise you on what to look out for. Once you pick a house you like, ask the REALTOR® for a second showing before making an offer. During the second showing, look for paint changes, molding alterations, and flooring transitions. Try to uncover hidden flaws a seller may have tried to hide. Maybe there’s a newly filled and painted wall crack or a water-damaged ceiling or floor. Look for mold, mildew, or leaks under any sinks. Look for foundation cracks. Watch for sinking patio concrete. If you observe mouse droppings in the pantry, spend a few minutes listening in silence. Do the same in the front and rear yards. Get a thorough picture of the neighborhood’s noise. Are there trains nearby? Listen for drips or leaks from faucets, pipelines, and showerheads. Listen for the toilets running. Keep an ear out for scratching sounds in the walls, floors, or ceilings. Walk through the home, including the garage. Does it smell like new paint and floors? Homes should smell clean, unscented, and devoid of dust. An over-sanitized or bleached scent may suggest an issue that was recently cleaned. Touch the counters, light switches, and doorknobs. Water stains on ceilings or walls are common in older homes. Touch the area to determine whether it’s moist. Turn on faucets and showers to test the water’s temperature and pressure. Hold your hand over the vents to feel the temperature. Check the bathroom’s heated flooring—is the carpet pad thick enough?

Homeowners’ associations (“HOA”) can be found in a variety of different types of housing. It is possible to have an HOA in all types of areas, including single-family homes, townhouses, duplexes, condominiums, and subdivisions of multi-family dwellings (apartment buildings). Buying a home in a community that has a homeowner’s association means that you’ll be required to pay assessment fees as well as obey its rules and regulations. Some places allow pets, while others do not. Some allow pets but limit their weight. Depending on where you live, you may or may not be allowed to have your own washer and dryer inside the unit.

Management services may or may not include the following: building and common area insurance, external maintenance, parking lots, garages, lawn service, snow removal, club house, swimming pool, trash collection, water, heating and A/C, cleaning service, internet, cable TV, security guards, etc. The amount of the assessment fees varies depending on where you live and what services are included. Roughly 90% of single-family houses are not part of any homeowners’ associations, while 90% of townhouses and duplexes are part of homeowners’ associations. Most assessment fees are due monthly. However, some are due bimonthly, quarterly, semi-annually, or annually. Ask your Illinois Star REALTOR® for details.

When selling a home, sellers have the option of including a provision in their contract indicating that the seller must be able to purchase a new property, or the sale will be canceled. For all practical purposes, this option has almost no chance of being accepted by the buyer of your old house unless the seller is in a very hot market with a limited supply of available homes for sale in the area.

If a seller decides that it’s in their best interest to purchase first, here are some things to consider. In a seller’s market, you may wish to purchase first and then sell. A seller’s market is one with little inventory and high buyer competition. Due to the disparity in supply and demand, purchasing first and then selling may be less risky. Again, few sellers would accept an offer contingent on the buyer’s ability to sell their current home.

Another option is to sell and close on the sale of your current home, and then begin searching for a new one. You may manage to get a new home under contract, but the closing will take place two or three months out. In this situation, you can rent or move in with a family member or friend till you close on your purchase. You would move your belongings into storage during this time.

Purchase prior to sale. One of the most challenging aspects of purchasing a new property before selling the current one is qualifying for two mortgages concurrently. Not everyone can qualify. Speak with a lender as soon as possible to determine whether you qualify for a new loan before paying off you’re existing one.

Hesitation may cost a lot of money in the end. If the home you’re considering is likely to sell soon, you should make a purchase offer promptly. If you don’t, you will likely lose the home because someone else will beat you to it. Study the subject and educate yourself prior to your house hunt rather than after you find the home you’re considering purchasing. If you fall in love with the property, there is a good chance that many others have as well. You are not the only clever shopper on the marketplace. Sit down and talk with your experienced Illinois Star REALTOR® as soon as possible.

After locating a property, it’s a good idea to put in an offer as soon as possible to prevent someone else from purchasing it. When a seller accepts your offer, they are unable to accept any other offers. You also in a better position to haggle on price and terms if your offer is the first one. You might lose the house of your dreams in a seller’s market if you take too long to decide.

One of the most difficult aspects of the home-buying process is deciding how much to bid on a property. To buy a home, you should take advantage of your Illinois Star REALTOR’S® knowledge and experience to come up with a price. Learn about the local market before making the offer.

Pay attention to market activity. What is the current state of the market? Is the market bullish or bearish? A bearish outlook means you will have less competition for the property because of a buyer’s market and Sellers will be more willing to accept reasonable bids. A bullish market means that any offer that is less than the list price will likely be rejected by sellers. Your offer should be as appealing as possible, relative to market conditions, to be accepted by the seller.

Comparable sales should also be considered. Another way to assess the strength of your offer is to consult with your Illinois Star REALTOR® for current market statistics regarding comparable houses that have recently sold in the area. Only recent sales are relevant. Look no farther than six months.

How much are the comparables actually selling for? Compare the original listing prices with the final sales prices. How much of a gap is there? Are properties selling for more or less than the asking price? What percentage of the list price will you be paying if you go below it? Your Illinois Star REALTOR® is the best source for accurate information.

Avoid becoming emotionally attached to the property when making an offer. Preparation and contingency planning are key components of making an offer.

You are getting the land and everything beneath its surface. You are also getting everything permanently attached to the land, namely, the house and everything inside the house that is permanently attached to the floors, walls, and ceilings, except for any items that are specifically excluded in writing. All items not attached are referred to as chattels, or personal property. Since personal property is not included in the sale of real property, all items of personal property must be listed in writing to be included in the sale. Examples of personal property include, but are not limited to, the following: stove, range, microwave, refrigerator, washer, dryer, etc. An Illinois Star REALTOR® will guide you through the process.

You should inquire about the utilities before purchasing a property. Consider: heating and cooling, electricity, water, sewers, waste management, and so on. It’s important to understand monthly costs to make sure that a property will fit your budget.

It’s wise to check your property on FEMA’s searchable floodplain map by clicking here. It will show the level of risk associated with the home you’re just about to make an offer on. Standard homeowners’ insurance generally does not cover flooding. If flood coverage is needed, the property owner must purchase a separate flood insurance policy, which adds an additional expense. Pricing varies depending on the property’s location and risk level. Ask your Illinois Star REALTOR® for assistance.

The typical mortgage process takes just more a month from application to closing. Your mortgage broker will be your primary point of contact throughout this period. They will answer your questions and ensure that all your documentation has been collected and sent to underwriting. Buying a home would be a lot more difficult without this person involved.

Our experience in residential real estate has convinced us time and time again that most buyers are better off using an experienced mortgage broker and not a bank directly. Mortgage brokers, like REALTORS®, are compensated for their work by commissions earned. Most loan officers employed by banks are not commission-based employees. Bank employed loan officers are compensated like any other bank employee; most have an annual salary. Mortgage brokers, on the other hand, are self-employed individuals. Who do you think will hustle 24/7 to make sure your loan application is not only approved, but also approved on time? Will it be the mortgage broker whose paycheck depends on your closing taking place, or will it be the bank employee whose paycheck does not depend on you?

Additionally, banks generally have limited mortgage loan programs. Your personal financial situation may or may not fit within those programs. Most mortgage brokers, on the other hand, work with at least 20 different lenders. If every one of those lenders offers at least 6 different loan programs and it is more likely that one of those programs will match your financial situation.

Banks rarely lend their own money and most banks do not offer lower interest rates or closing costs. Mortgage brokers lend their investors’ money at equal or lower interest rates because they have access to wholesale interest rates and pass the savings onto the buyer. Additionally, mortgage brokers often sacrifice part of their commission to cover a portion of the buyer’s closing costs. You can negotiate the loan terms and costs with a mortgage broker. Banks would never consider negotiating.

Closing costs, generally, are 2% of the home’s purchase price. Common closing charges include your lender’s fees for origination, processing, and underwriting the loan, appraisal fees, title insurance, mortgage and deed recording fees, document preparation fees, and credit report fees.

Are there any hidden costs to owning a home? Many new homeowners will discover maintenance issues with their home. HVAC, electrical, and plumbing problems may quickly accumulate. While these expenses are usually included in annual maintenance, they can be rather substantial for certain homes.

Utilities. Most people who rent are accustomed to paying for basic amenities, such as power, cable, and internet. When you buy a house, though, you will have to pay a monthly fee for certain utilities you’re not used to. Water, sewage, and garbage collection costs are frequently included in rent. When you’re looking for a home, make sure you budget for these expenses as well.

Real estate tax. You will pay property taxes on your home every year. Property taxes might vary significantly depending on where you live. The average property tax in Cook County, Illinois is about $7,500. If you have a mortgage, your property taxes are usually included in your total monthly mortgage payment. The lender will place your tax dollars in an escrow account and pay your property tax bill when the county issues tax bills.

Dues to the homeowners’ association. If you’re moving into a condominium, townhouse, or duplex, you will likely have to pay a homeowners’ association fee. These association dues vary significantly depending on location and the services included in your dues.

Upkeep of property. Your new home will require upkeep over time, and if you’ve been a tenant, maintenance was most likely your landlord’s duty. Home maintenance expenses can range from modest ones such as air filter replacements to big ones such as roof replacements.

Homeowners’ insurance is insurance that covers your home. You will be obligated to maintain homeowners’ insurance coverage if you have a mortgage on your property. Even if you buy your house for cash, you should have insurance. If you have a mortgage, the insurance premium will become part of your monthly payments as well. Remember, floods are not covered by standard homeowner’s insurance policies. If you live in a flood-zone, your lender will require you to purchase a separate flood insurance policy.

Understanding “Points”: When you apply for a mortgage, you will have the option of paying mortgage points. Points are a one-time payment in exchange for a lower interest rate. In most situations, the long-term savings outweigh the cost of paying points up front. One point is equivalent to one percent of your loan’s original principal sum.

Mortgage protection insurance is a type of insurance that protects your lender if you put down less than 20% on a home. Your lender will almost certainly ask you to purchase private mortgage insurance, which will be added to your monthly mortgage payment. Private mortgage insurance, also known as PMI or MI, is available to borrowers of traditional and alternative forms of mortgages. This cost varies greatly based on the type of mortgage and the amount of money you put down. After you’ve paid down your mortgage to an 80 percent loan-to-value, or LTV, you can request that your mortgage insurance be cancelled. However, cancellation of the mortgage insurance premiums is not possible with FHA mortgages. The only way to do it with an FHA loan is to refinance it with a non-FHA loan.

What is private mortgage insurance? In the event of a borrower’s default, private mortgage insurance, or “PMI,” protects the lender from financial losses. Loan payments are increased by the cost of this insurance. Under federal law, you may cancel PMI once you have at least 20% equity. When you cancel PMI, it will not affect any other obligation you may have to maintain other types of insurance.

How can I get rid of private mortgage insurance (PMI) on an FHA loan? If you have an FHA loan and put less than 20% down, the Federal Housing Administration mandates that you pay PMI throughout the life of the loan. You cannot get rid of PMI on an FHA loan. With a conventional loan, when you have 20% equity, PMI drops automatically. The only feasible option to eliminate mortgage insurance on an FHA loan is to refinance it with a conventional loan with at least 20% equity or an LTV of at least 80%.

Automatic PMI Termination: Under the Homeowners Protection Act of 1998, if your loan closed on or after July 29, 1999, and you are current on your loan payments, PMI will automatically terminate on the date the principal balance of your loan reaches 78 percent of the property’s original value, If you are not current on your loan payments as of that date, PMI will be automatically terminated when you become current.

If your loan closed before July 29, 1999, or it is not a single-family primary residence or second home, The conditions for canceling mortgage insurance for mortgages closed before July 29, 1999, are not statutory under federal law. They may be changed at any time (unless otherwise required by state law). To determine if you can cancel your PMI or for further information, contact your lender directly.

One of the most important steps in buying a home is getting it inspected. What an inspector looks for is how the house has been cared for by the previous owner. Aside from any local code violations, the inspectors can comment on structural and aesthetic flaws.

It is not necessary, but strongly recommended. Buyers might use a final walk-through to ensure that nothing has changed since their original inspection of the property. A follow-up visit is also recommended if repairs were requested and agreed to by the sellers. This ensures that all repairs are completed in accordance with the agreement made in writing.

When a former owner fails to pay taxes or to pay contractors for work done on the home, title insurance protects the new owner against claims made against the property that were caused by the seller. Title insurance protects you from legal expenses and title concerns that may emerge throughout your time as a homeowner. At closing, you will see two types of title insurance: lender’s title insurance and owner’s title insurance. The purchaser is responsible for the cost of the lender’s policy. This protects the lender’s interests from any claims made against the property. The owner’s policy will protect you from unforeseen title troubles for the duration of your ownership. In most real estate transactions, the seller of the house is contractually obligated to pay for it at the time of closing. Your real estate attorney is the best source of information on this subject.

The Federal Housing Administration (FHA) and the Veterans Administration (VA) may offer financial assistance programs to low- or no-down payment loan applicants. Some buyers may be eligible for an FHA loan or a home-buying program. VA-backed loans may not require a down payment at all. Financial experts suggest a 20% down payment on a property as a strategy to save and avoid having to pay for private mortgage insurance. Neither FHA nor VA loans are funded by those institutions. FHA and VA loans are handled by private lenders just like any other mortgage loan.

It’s a good idea to know what to expect during a real estate closing so that things go smoothly. When buying a home, make sure to know exactly what types of personal identification documents you will need to bring. You may also need a bank draft check to cover your down payment, closing costs, and the balance of the purchase price if you are buying with cash. Your lender will wire your loan money directly to the title company for disbursement. Any amounts over $50,000 must be wired to the title company by law. Once all closing documents are signed and funding is approved by your lender, you will get the keys to the property.

It’s time to settle into your new home. Moving isn’t something most people look forward to doing. However, relocating can be a lot easier if you plan ahead. Once you’ve settled into your new home, organize your new home’s documents from the closing and keep them in a safe place. Your home inspection report is now your maintenance list of things to keep an eye on. Call all utility companies and have the accounts placed in your name. Update your driver’s license at the Illinois Secretary of State’s office with your new address. Change all the locks. Report your new address to the US Postal Service to have your mail forwarded to your new address.