Many potential home buyers believe purchasing their first or next home to be a straightforward task. However, the home buying process is actually quite tedious, complicated, and can quickly go south if potential buyers don’t conduct their research and have a solid understanding of the endeavor.
It’s pertinent that potential home buyers gain a general understanding about the area’s housing market, real estate laws, and financial commitment that buying a home entails. Read below for a step-by-step guide to purchasing a home in Nevada.
Evaluate Your Current Financial Situation
The monetary cost of home owning includes a whole lot more than a monthly mortgage payment. If you’re currently a renter, it may sound enticing to put what you’re currently paying for rent, into the mortgage of a home so you can build equity and gain security. However, the monthly mortgage payment is just one small piece of the puzzle.
When determining if purchasing a home is right for you, take a hard look at your current financial situation. How much do you have saved? Would you credit score facilitate low interest rates over a 30-year mortgage or cause lenders to offer steep rates on short-term loans? Having enough for a down payment can also cut down on monthly expenses because buyers won’t have to purchase mortgage insurance.
Even if your current financial situation is not a picture of monetary health, there are added factors that could outweigh, and bolster your ability to purchase a home. Plans to remain in the same area, job security, and general life stability can all be positive, contributing factors when looking to purchase a home.
Find a Great Nevada Real Estate Agent
We mentioned previously that the home buying process is an arduous one. Many do go it alone but can end up spending months or years searching for the perfect home that they can both afford and see themselves in for years to come.
Partnering with a highly experienced, local buyer’s agent is one of the best things you can do when stating your journey to home ownership. Sellers usually pay the buyer’s agent’s commission fee, so this service is free to you.
Working with a top-rated Clever Partner Agent can even put money back in the buyer’s pocket. Partner Agents offer a $1,000 Home Buyer Rebate to buyers in qualifying states — which can be used to cover all sorts of closing costs that the buyer is traditionally responsible for.
Learn More: What Does a Real Estate Agent Do for a Buyer?
Read Up on Local Real Estate Market Trends
When it comes to buying a home, timing can have a huge impact on the initial asking price. Seasonally, homes tend to tick up in price during spring and summer. However, more inventory is on the market, giving you the chance to find something you really love. Sellers can be choosey as buyers are aplenty during this time and often times, bidding wars start over the most desirable homes.
These trends can fluctuate at state levels and local levels. Staying on top of the market can take on the semblance of a full time job. Your Clever Partner Agent will know the best times to look, bid, and buy homes in your desired area.
Home values in Nevada rose by 10% throughout 2018 and are projected to climb by another 4.9% this year. The state has shifted from a sellers market, into a buyers market, so now could be the best time to snag up a Nevada home.
Homes sit at a statewide average of $293,600 but many neighborhoods fall well below this average. In Nevada, home prices are 8.4% less in the initial months of the year, before spring buying season ramps up. A local realtor will provide invaluable guidance if you’re looking for homes within particular areas, at certain price points.
Learn More: Will it Be a Buyer’s or Seller’s Market in 2019?
Get Pre-Approved for a Mortgage
Before even beginning the house hunt, it’s imperative that potential buyers get pre-approved for a mortgage. Imagine finding your perfect house that you believe to fit within your budget, but come to find, lenders want to charge you a higher interest rate, adjusting your monthly payment by a good deal more than you planned on.
That’s why getting pre-approved for a mortgage can save you time and heartache. Pre-approval is different from pre-qualifying for a mortgage. Pre-qualifying doesn’t require a credit check and is often self reported, leaving room for error when you go to actually get a mortgage loan.
Pre-approval requires a professional to take a look at your finances, instead of relying on information from you. They’ll pull a legitimate credit check which counts as a “hard hit” on your credit score. Once pre-approved (hopefully), you can spend anywhere from three to six months looking for a home before needing to get re-approved.
Step 5: Start House Hunting
Discuss your expectations, goals, and budget with your realtor before even thinking about house hunting. It’s fun to “window shop” but if you start looking at houses outside your budget, chances are, you may try to buy a house that’s outside your budget. It’s all fun and games until you’re paying a mortgage that’s hundreds of dollars higher than anticipated.
Now, we’re not saying this shouldn’t be fun. Buying a home is an exciting, stressful, happy, emotional time that feels more like a rollercoaster than a financial transaction. But at the end of it all, you get to start a new chapter of your life in a space that is all your own!
Rely on your agent to provide you with houses that are both charming and affordable, but most important that fit your needs, budget, and future plans. Your local agent will have their finger on the pulse of the local real estate markets, safe neighborhoods, quality school districts, and more. They will also be able to advise on which neighborhoods, counties, and regions are trending up, helping you make a wise investment.
Learn More: Free House Hunting Checklist
Make an Offer
So you’ve found the home for you, congrats! Now for the next step — you and the seller will sit across the table from one another, in a dimly lit room, while you scrawl the offer on a wrinkled slip of paper and pass it, upside down, across the table. Only kidding — it’s not this simple.
When you find the house you want, you and/or your realtor will contact the seller’s agent and provide said offer. Protocol for making an offer varies by location but certain line items are always included. Address of the prospective property, monetary offer, terms (cash or loan), target closing date, closing cost responsibilities, and contingencies.
An experienced agent is a huge help during this process as he or she will know what contingencies to include, what closing costs you can request the seller pay, and can request certain disclosures that might not be required by law.
Learn More: How to Make an Offer on a House
Inspections and Negotiations
After making an offer and the seller accepting the offer, the buyer can and should have the home inspected. If anything is amiss, the buyer can request the seller make the respective repairs or replacements. If the seller refuses, the buyer can back out of the sale as long as corresponding contingencies were included in the buyer’s initial offer.
Experienced agents are expert negotiators and know what to push back on, what to demand, and when to advise the buyer to walk away from the deal. Usually, knowledgeable realtors can evaluate the market and determine whether the buyer or seller has more negotiating power.
It’s Closing Time!
You’re in the home stretch now! Once the seller accepts the offer, it’s time to tie up all the loose ends. A lot of these ends relate to closing costs. In Nevada, the party who pays closing costs isn’t specifically set forward by the state. The buyer and seller can negotiate who pays what, with each party respectively paying certain fees related to their part in the transaction.
Buyers will need to pay a variety of costs associated with securing the loan while the seller will pay the transfer tax fee, reconveyance fee, and an option home warranty fee, among other items. Both parties prorate property tax and (if applicable), homeowners’ association fees and pay their respective shares.
Alternatively, buyers can estimate that closing costs will average out to around 3% of the sale price. Let’s say you agreed to pay $200,000 for a home in Nevada. You can estimate that you will pay around $6,000.
An experienced realtor can help you prepare for what to expect when closing on a home. If you’re looking to purchase a home in Nevada, contact Clever to speak with a Partner Agent in your area.