- How to get financing for your home purchase
- What you will need for your loan application
- What’s included in your new mortgage payment?
- Finding the right house for your family
- You’ve Found Your Dream Home – Offer
- Home Appraisal and Home Inspections
- What does the Home Warranty cover?
- Homeowner’s Insurance
- Closing Costs
- Your Offer Was Accepted! What’s Next?
- Moving Tips
Buying a home in Columbus, Ohio can be a daunting process. But it can also be fun and exciting. And that’s the way it should be. Your new home search should be a positive and memorable experience. Of course, there are pitfalls along the way. At The Columbus Team, we’ve seen and heard it all. And we’ve learned so much over the years. That’s why we believe we’re a good choice for home buyers … because we can help you make good choices that are right for your situation. We can help you avoid snags and snafus.
To get our clients started in the right direction, we’ve put together this Guide to buying a home in Columbus, Ohio. It includes so much valuable information. It answers most, if not all, the pertinent questions that home buyers often have. It’s chocked full of important information for those who wish to buy a home in Columbus, Ohio.
Of course, our team is always available if you should have additional questions. We enjoy speaking with potential home buyers and clients. We know how stressful home buying can be and we understand the need to get all the answers so you can make an informed decision about each item along the way.
How to get financing for your home purchase
The first question we often hear is about financing. Everyone wants to get the best rate possible but it’s critical to work with reputable lenders you know you can trust.
Below are some financing tips from The Columbus Team:
- Talk to a few reputable lenders and see who’s offering the best terms and rates. If you’re not sure how to get started, ask us for references.
- Get pre-approved for a specific loan amount. We don’t want you searching for homes that are out of your price range. Your time is valuable. Pre-approval increases your buying power and gives you confidence during your search.
- Beware of internet lenders. While some are reputable, there are many who are not. They may make it seem like you can save lots of money and get a great deal, but in the end, your experience may be less than desirable and their amazing deal may not be what it seems.
What you will need for your loan application
In order to make things go as smoothly as possible, it’s a good idea to have all the components of your loan application ready to go. This will minimize the potential delays and ensure that the home buying process moves along flawlessly. Below is a basic list of what you will need:
- Names and addresses of employers for the past two years
- W-2 forms for the last two years
- Paystub dated within the last 30 days that shows your year-to-date earnings
- Dividend and interest income earnings
- Child support and alimony earnings (optional)
- Verification of other income
In addition to the above, you will also need to verify debts and assets, such as student loans or other property you may own. Below is a list of other documents you may need:
- Bank statements for the last 2 to 3 months
- Gift fund source, if applicable
- Copy of the purchase contract
- Property disclosures
- Information concerning all debts, including credit cards, car loans, student loans and any other types of debt, even those where you are only a cosigner
What’s included in your new mortgage payment?
Most people are familiar with the term PITI when it comes to mortgage payments. But what does the acronym really stand for? Below we go over the meanings with explanations for each so you’ll know what and who you’re paying each month.
P=Principal paid each month
I= interest collected each month by the bank on monthly principal balance
T=Taxes. Each month the lender collects 1/12 of the annual real estate taxes due. These are held in an escrow account by your bank. The bank will pay your taxes every six months when they are due. Escrow accounts are non-interest-bearing.
I= insurance. Each month the bank will collect 1/12 of the annual amount of your homeowners’ insurance policy. This monthly premium payment is deposited in an escrow account, then paid out annually by the lender to your insurance company. Escrow accounts are non-interest-bearing.
In many cases, there is also a fifth element of your mortgage payment. This is known as PMI or private mortgage insurance. If your down payment will be less than 20% of the purchase price of your new home, you will be required to pay PMI until the mortgage balance has been reduced to 75% of the home’s market value. All FHA loans, regardless of the amount of down payment, require PMI.
Though all this information may sound complicated, your real estate agent is there to guide you through each process. Your agent can be a good source of help and information. With all these financial and technical steps out of the way, you can begin the process of house hunting with peace of mind.
Finding the right house for your family
Your real estate agent will use the MLS or Multiple Listing Service to help you find a great home. Your real estate agent will analyze your home buying criteria and customize their search on the MLS just for you. Once the agent has narrowed down some listings that are of interest, it’s time to schedule appointments to view the properties. Buying a home in Columbus, Ohio doesn’t necessarily have to be a long, stressful process.
These are great way to get out in the neighborhood and see what’s on the market in the area you’ve specified. These are most often held on the weekends and this can be a relaxing way to get out and view all the home styles and designs in your price range. You should sign in each time you view an open house. Leave your name and phone number and your real estate agent’s name.
Some people are interested in building their own home from scratch. If you have the budget for it, then this is a great way to get a home that’s perfect for you and your family. The Columbus Team can recommend some excellent homebuilders in the area. If you’re interested in this, please let your agent know. We can show you some of the floor plans from popular area builders and this can save you some time and hard work.
The internet is a great place to find just about anything. You can search from the comfort of your own home while relaxing in pajamas. If you do find something you’d like to see, simply contact your agent at The Columbus Team and we’ll get an appointment set up for you to see the home. Once you’re familiar with internet searching, we can even give you access to the MLS. When new listings come up that we think you’d be interested in, we’ll contact you right away. This is the easy way of buying a home in Columbus, Ohio.
For Sale by Owners (FSBOs)
These are homes listed by owner and they’re not on the MLS. If you see something that grabs your attention, just let us know. We can contact the owners on your behalf and line up a showing. It’s more important than ever on these types of listings to have an agent working on your behalf. We’ll make sure that the deal is properly managed and your interests are protected.
Sometimes it’s just fun to get in the car and drive around the neighborhood when buying a home in Columbus, Ohio. This is still a popular method of finding a new home. You can get out, get some exercise, meet the neighbors or go to a few open houses on Sunday afternoon. Whatever works for you, we’ll be there to ensure that things go smoothly once it’s time to make the deal.
You’ve Found Your Dream Home – Now What?
Once we find something you love, we’ll go to work researching comparable sales in the area. We’ll want to make sure you get the best price for your new home. If you’re ready to make an offer, we will fill out an offer to purchase. Our agents will explain everything thoroughly. We want you to be fully aware and involved in the negotiations. If you have any questions, please ask your agent.
Your offer should include:
- The home price and earnest money deposit
- Attorney review
- Financing details
- Home inspection
- Closing and possession date
- Duration of offer
Presenting your Offer
Once you’ve signed the offer, your agent will deliver it to the listing agent. They will then present the offer to the seller. Often, sellers will counter. They’ll ask for a higher selling price, a shorter closing date or they may want you to pay more of the closing costs. It’s important to stay near your phone so that we can respond quickly to any questions or offers from the seller.
Once both the buyer and seller agree to the terms, both parties will sign the purchase agreement. At this point, the deal is considered to be “under contract” and this is a legally binding contract for both parties.
Negotiating the price, terms and conditions of the sale are critical to a successful home buying experience. There’s more to this process than meets the eye. Below we go over a few of the details that buyers and sellers often negotiate during the offer process:
Earnest money: Earnest money can be thought of as a security deposit that the buyer pays so that the seller will take their house off the market. This money is held in an account by our brokerage that does not bear interest. At closing, this money can be used toward the purchase price. Sometimes, the seller will ask for more earnest money as a sign of good faith that you will complete the deal and finalize the purchase.
Below are some rough guidelines concerning earnest money:
|Purchase Price||Earnest Money|
|$100,000-$300,000||$1,000 – $3,000|
|$300,000+||$2,000 – $5,000|
Note: Earnest money must be paid and deposited within 72 hours of offer acceptance by both parties.
Most lenders will have an appraisal done to make sure the purchase price is justified. It is the financial responsibility of the buyer to pay for this. The approximate cost is between $400-$600. Some lenders require you to pay for this upfront while others will allow you to pay for it at closing. The appraisal is typically done within two weeks after the home inspection contingency is removed. Your agent at The Columbus Team will follow up to ensure that everything is completed in a timely manner.
The home inspection is all about having a professional inspector come in and assess the shape and condition of the home. Their objective is to give you an overview of the home’s condition that highlights minor and major issues it might have. For instance, if the home had a faulty furnace, that would be a major expense that you’d want the seller to help repair.
Sometimes home inspections don’t turn up anything; the house is in good shape with nothing to worry about. Sometimes the inspector will find a few loose roof tiles, a leaky skylight or bricks that have damage to them. There are times when the inspector will find more serious problems with the home, such as asbestos or foundation problems. Whatever it is, just know that it is fixable. There’s simply the matter of cost.
Once you know what the problems are, you can go back to the seller and negotiate to have all or part of the work paid for by the seller. If the issues are major and you don’t feel good about moving forward, this is a valid reason to cancel the contract. There are usually no penalties for canceling the contract for reasons like this. You will have to return to the process of searching again and many home buyers will find this a bit distasteful and wearying.
The inspection typically takes 2-3 hours to complete and you can be there for it if you wish. At the end, the inspector will give you a full report on all findings. Usually, it is the buyer’s financial responsibility to pay for the inspection. Unless otherwise negotiated, the cost of the home inspection is due on or before the date of the inspection.
Financial responsibility: Buyer
Timeline: Inspection should be completed within 10-14 days
Who schedules: The buyer
Cost: Approximate cost is $400-$600 depending on the size and age of the home.
A termite inspection is not always indicated. For instance, if you’re buying a new home, there would be no reason to do a termite inspection. If the home is older, this may be an important step. During the inspection, the home is thoroughly checked for the presence of termites and also for any damage the insects might have done in the past.
Financial responsibility: Buyer
Timeline: Within10-14 days
Who schedules? Buyer or The Columbus Team
Approximate cost: $85-$100 (paid at the time of service)
This measures the radon levels in a home. Radon is an oderless, colorless gas that is formed during the natural breakdown of uranium in soil, rock and water. This test is optional but recommended.
Financial responsibilty: Buyer
Timeline: First 10-14 days (should be scheduled at the same time as the home inspection)
Who schedules: Buyer or The Columbus Team
Approximate cost: $120-$150
Home Warranty: This is a great idea for older homes but can also be useful when purchasing a newer home as well. A Home Warranty is basically an insurance policy that covers all your major appliances for 12 months. If your water heater goes out, you’ll pay a small deductible and the insurance company will cover the rest.
What does the Home Warranty cover?
Though this may vary from one insurer to the next, below are just a few things covered in the policy:
- Garbage disposal
- Garage door opener
- Many others (just ask)
Financial responsibility: Seller, if negotiated in the contract
Timeline: Seller will often order this at the same time the house is listed.
Who schedules: The Seller or The Columbus Team
Approximate cost: $500 – $725
Gas Line Warranty
This is sometimes included in the Home Warranty. It covers the cost of repairs to gas lines that run to or inside your home. Typically, the policy goes into effect at closing and continues for a period of 12 months. With the aging gas lines in many cities, this can be a good idea for home buyers.
Financial responsibility: Seller
Who schedules: The Columbus Team
Approximate cost: $95 (though plans do vary in cost and coverage)
Homeowner’s Insurance is an essential form of property insurance that is usually required by lenders. It often covers a wide range of problems that can come up. The buyer will need to have a homeowner’s insurance policy in place two weeks before closing, but certainly at the time of closing. The cost will depend on the age and condition of the home. Also, on the depth of coverage you choose.
Normally, a homeowner’s policy will cover your home and personal belongings for things like:
- Plumbing that freezes
Though each policy is different and you can ask for more coverage in your policy, the homeowner’s insurance often does not cover:
- Water damage from tornadoes, hurricanes or other flooding
- Power failures
- Nuclear disaster
- Damage from pets
Financial responsibility: Buyer
Timeline: 2 weeks before closing
Who schedules: Buyer
Approximate cost: $700-1400 (though plans do vary in cost and coverage)
The lender will provide you with a Good Faith Estimate on all closing costs. Their estimate will include such things as:
- Loan origination fee
- Title insurance fee
- Deposit for tax and insurance escrow
Financial responsibility: Buyer
Approximate Cost: $2000-$4000 (Some costs will fluctuate such as the taxes, escrow for insurance and the closing date.
Timeline: At closing
Who schedules: The Columbus Team will follow up with your lender to make sure everything is ready for the closing date.
Your attorney will asssist you throughout the closing. You’ll require a legal expert, a Real Estate attorney, to review the documents and ensure that the contract is sound and that all the conditions have been met. They will attend the closing just to make sure things are completed correctly.
The Columbus Team has a list of pre-approved real estate attorneys that you can choose from or you can hire your own. Though this is optional, it can save time and money. Most real estate professionals do recommend this. The attorney’s job is to thoroughly inspect title docments, mortage documents, purchase agreements and transfer documents.
Financial responsibility: Buyer
Timeline: At acceptance of offer
Who schedules: Buyer choose, but The Columbus Team can arrange
Approximate cost: $300-500 (though prices do vary)
Your Offer Was Accepted! What’s Next?
Congratulations! Your offer was accepted. There’s lots to do before closing but your real estate agent is there for you. They will make sure that all the details are handled properly and that all the paperwork is in order. This is where having a professional agent from The Columbus Team will really matter. We want buying a home in Columbus, Ohio to be a positive, rewarding experience.
Our agents are well-experienced. As soon as your offer is accepted, they’ll go to work lining up inspections, ordering the home warranty and negotiating for remedies if problems are found. You’ll enjoy peace of mind knowing The Columbus Team is on top of things. Below are a few things that will unfold once your offer has been accepted.
Tasks for the Buyer
- Earnest money deposit
- Meet with lender to confirm home financing
- Schedule and attend home inspection
- Schedule termite and/or radon inspection
- Let The Columbus Team know who your attorney is
The Columbus Team
- Schedule termite and/or radon inspection (both are optional)
- Order Home warranty
- Negotiate any requests for repairs/remedies
- Coordinate closing date and time
- Appraise home after completion of home inspection
Two Weeks before Closing
- Call utilities and transfer service
- Prepare change of address notifications
The Columbus Team
- Call parties to confirm progress
- Complete loan agreement
- Order survey
- Complete remedies
- Provide receipts for any repairs/remedies
- Order final utility readings
- Final walkthrough
- Wire funds to Title Company for closing
The Columbus Team
- Call buyer with exact closing expenses
- Email settlement statement to The Columbus Team that includes a breakdown of all closing costs
- Prepare the closing statement (HUD)
- Attend closing
- Bring photo ID
- Attend closing
- Bring keys and garage door openers
The Home Stretch: A General Checklist
Home inspections are an important part of the buying process. Once the home has been placed under contract, the home inspection should be performed by an independent contractor hired by you to provide an objective opinion as to the overall condition of the property and its components. Normally, within 10 to 14 days after signing the contract the home inspection is completed. This gives the buyer an opportunity to ask the seller to make repairs that have been deemed necessary. There may be structural issues or safety concerns that the inspector has identified.
It is the buyer’s prerogative to ask for these problems to be addressed. If the buyer is not satisfied with the condition of the property after the repairs have been completed, this can allow the buyer to terminate the contract. This, of course, only happens in extreme cases. Normally, the buyer and seller should work together to try and remediate any problems so the sale can go forward. Your agent from The Columbus Team will be there to help facilitate this process. If often helps to have a mediator there to work between the buyer and seller.
The Home Inspection Clause
The home inspection clause is not meant to be a release from the contract because of a change of heart. It is meant to be a formal method of assuring the buyer that the property and its components are in good working order. The buyer has a right to know if there are serious safety hazards, mechanical problems or structural issues with the home. Normally, the inspector will quote a price for the home inspection based on the size of the home and its age. The home inspector will require payment on or before the day of the inspection.
We have a list of home inspectors in the Columbus, Ohio area who have demonstrated superior service in the past. You can select someone from this list or search the Internet to find your own home inspector.
The Final Walkthrough
24 to 48 hours before closing, it’s important to do a final walk-through of the home to ensure that all repairs have been made and the property is in good order. Before heading out to the closing, make sure that the funds have been wired as specified. Be sure to bring photo ID with you. Your agent and attorney are there to make sure things go smoothly and as planned, so just relax and try to enjoy the moment.
Protecting Your Investment
Buying a home will most likely be the largest financial investment you make in your lifetime. It’s important to take every precaution to protect your investment. Hiring a real estate attorney can ensure that all documents are prepared correctly and that your rights are protected.
Your real estate attorney will review the title and all other documents on your behalf when you are buying a home in Columbus, Ohio. We have a list of professional attorneys in the Columbus, Ohio area that we can share with you. If you choose, you can search the Internet and find a real estate attorney on your own.
The Big Day Arrives!
The big day has finally come. This is the day you’ve waited for and anticipated. You will meet with your real estate agent and attorney (if you have one) at the title company to close on the property you’ve purchased. The seller will be there as well along with the title company representative. Ownership of the property will be transferred from the seller to you at this time. Your earnest money will also be returned at this time or it can be applied to your down payment if you wish.
Now that you’ve closed on your new home, the next step is simply to go home and start packing. This can be a stressful event for most people. There are a few things you can do to help things go well, reducing that last-minute pressure.
- Get plenty of moving boxes.
- Make sure you have at least two rolls of 2-inch wide box sealing tape and tape gun if possible.
- Purchase a large roll of bubble wrap.
- White paper for wrapping items (using newspaper can cause black ink to transfer to objects)
- Schedule a moving van to come on the day you want to move. This should usually be scheduled at least two weeks in advance.
- Ask for help from friends and family members if you feel you need it.
Tips for Out-of-Town Buyers
If you’re moving from out of town, this can be a little more complicated. The cost of moving goes up the further the distance. Be sure to get estimates from moving companies in advance so you’ll know what to expect. If you’re moving from hundreds of miles away, you’ll need to schedule your move weeks in advance.
Sometimes coordinating with utility and cable companies in another city can be confusing. Don’t leave these little tasks to the very end. Buying a home in Columbus, Ohio is a big job but with The Columbus Team on your side, you can get the help you need so things are not so stressful.
Below are a few things to think about or take care of before moving:
- Check with your bank about moving your account if necessary.
- Request records from doctors and dentists.
- Record all moving expenses. These are sometimes deductible on your income tax. Be sure to save receipts.
- Plan your travel itinerary and make hotel reservations if necessary. It’s a good idea to let friends know when you’ll be leaving.
- Pay local bills and close out local accounts if necessary.
- Have a garage sale and get rid of items you no longer need/want.
- Don’t forget to have the mail changed!
The Columbus Team –We’re Here to Help!
Having the right real estate agent is so important when buying a home in Columbus, Ohio. We use our years of experience and professional skills to help you navigate the process with as few snags as possible. We understand how important it is to get the home buying process just right. We don’t want you over-paying for your new home. In addition, we don’t want you overlooking anything important along the way.
When you work with The Columbus Team buying a home in Columbus, Ohio, you’ll know you have people who care to watch your back. Our promise to you is great service! We’ll be there throughout the process. We’ll try to ensure that things go smoothly with as few snafus as possible. If you have questions, comments or problems, please contact us.
Our job is to make buying a home in Columbus, Ohio a joyful, stress-free experience. We want you to get a beautiful home at a great price. You can count on our team to be there throughout the home buying process.