homeownership Archives - The Coleture

March 9, 2021March 9, 2021

Congratulations! You’ve Closed On Your Home. Now What?

It has taken forever to get to this point. You have been so ready to move, you could taste it. Buying a home was a goal so far in the distance, but once on the path to attaining that goal, the execution seems almost instant. Last you knew, you were under contract, but an entire month has passed. All documents have been signed. You get your keys. You take your pictures for the ‘gram. Suddenly, you realize: You’ve closed on your home. Now What?

There are several important things you must do soon after closing, and depending on what type of seller you have just dealt with, you want to make sure you get a few of these things done right away.

"Congratulations! You've closed on your home. Now what?" -Jillian showing she is camera ready. — *Congratulations! You’ve closed on your home. Now what?* Get ready for that new ID pic.

Be Camera Ready

It is quite possible that you may feel slightly overwhelmed right now. There is just so much that you have to do, but you have to start somewhere. The very first thing on your to do list should be to head to the DMV! That’s right. You have to get your new driver’s license or state identification card with your new address. You will need proof of residency, so take your closing documents with you.

Connect your services

Yes. The electricity was on for you to look at the house several times; however, the now former owner, is not going to keep those lights on for you. Contact your local utility company over the phone, and ask them what their requirements are to have the utilities turned on in your name, or to transfer your existing account. This account setup or transfer may be able to be handled entirely over the phone or online.

Next up, contact your local sewerage and water company. Normally, if you are a resident of New Orleans, you would be required to go in-person with the declaration page of your homeowner’s insurance in tow. You would also be required to pay a $100 deposit. However, my suggestion would be to call ahead to confirm the requirements, especially with the existence of the pandemic.

After that, we must tackle one of the more annoying account setups. You know who it is. “We will be there on Tuesday between 8am and 8pm.” *insert eyeroll here* Internet is one of our core services these days. Call ahead to schedule the connection setup for your internet and/or cable services. If your home is new construction, be sure to let the company know that ahead of time. It is possible that the company may not be able to locate the address in their system, and may need to do some additional work for connectivity.

Get Your Homestead Exemption

Contact the Tax Assessor’s office to apply for your Homestead Exemption. A homestead exemption serves multiple purposes, but one of the most important features is the reduction of your property tax liability. The current requirements to apply in Orleans Parish are as follows: To claim a Homestead Exemption, all owners who occupy the property must appear in person at the Assessor’s Office and present the following:

Proof of ownership (Act of Sale or Warranty Deed)
A valid Louisiana Driver’s License or Louisiana State I.D. (address must correspond to property’s address on application)
A current unpaid Entergy bill for the property, with service location and mailing address being the same, showing standard residential usage; OR
A landline telephone bill or cable bill (Direct, Dish or Cox).

There are also other types of homestead exemptions, such as a disabled veterans or age freeze exemption that may have a different set of requirements. As an example, for those seeking age freeze exemptions in Orleans Parish, you must be 65 years old by December 31st the year prior to the exemption start. In addition to that, you must provide proof of income and you are still mandated to comply with all other requirements of a general homestead exemption.

A homestead exemption can be applied for at any time. In Orleans, you only need to apply once, and the exemption remains permanently, unless you move. Note: You can only have one homestead exemption, as you can only have one primary residence.

Termite Contract

If there is an existing termite contract that’s transferable, go ahead and put that down on your to do list. We want a lapse in nothing. Contact the termite company, provide them with your information, and that should be that (unless a payment is required. This information should have been disclosed prior to closing). Should you be responsible for obtaining your own termite contract, then you want to be sure to contact a few different places to compare quotes. If you have not figured this out by now, always get quotes from multiple sources and compare your options.

Change of Address with the USPS

Change your address with the post office. There will always be something or someone you forgot to give your new address to. You can now take care of this online for $1.05 charged to your debit or credit card.

A few tips that you didn’t know you needed

Still thinking you’ve closed on your home. Now what? Here are a few tips that can help ease the last of that anxiety.

Make sure you set aside a rainy day fund for home needs only. You can no longer “call the office” to solve your problems.
Pay a little extra on your mortgage each month, even if it’s $5. You want to pay off your mortgage sooner than later, and every little bit counts.
You can always review or change insurance companies if you are able to find a better deal. The rates you initially locked in at won’t likely remain the same after the first year. If the prices get too high, find shop around.
Greet your neighbors. Forming a real sense of community with your most immediate neighbors can foster lifelong friendships and unofficial “watch” systems of your property.

"Congratulations! You've closed on your home. Now what?" Timmy relaxing in the bed. — *Congratulations! You’ve closed on your home. Now what?* Timmy says: Make up your bed and relax in it all day!

Enjoy Your New Home

Finally, the real moment of relaxation and joy. You own this home! There should be no rush to get things done a certain way. Take your time and get to know your space a little bit. Sometimes, what you had envisioned could change once you get settled in. And if you feel like you just can’t wait, maybe look into an interior designer or decorator. Some of them may not be as expensive as you think.

Remember when I said do not make any large purchases or take on any large debt? Well, now is the time you can splurge. Buy that new car or go on that furniture shopping spree. The world is yours! Congratulations! You’ve closed on your home. Now what?

February 28, 2021February 28, 2021

So Your Offer Has Been Accepted. Now What?

You’ve been on the ground, searching for the property of your dreams for months and months. A million different times, you’ve changed your mind about what you want. You’ve driven yourself (and your real estate agent) crazy. All of a sudden, there is silence amongst the noise. You’ve found your perfect space. This is it! You have your agent write an offer. It’s accepted. She says to you, Congratulations! You’re officially under contract. Meanwhile, you’re thinking: Now What?

"So Your Offer Has Been Accepted. Now What?" -a look of confusion while wondering what's next

Purchasing your first piece of real estate is an endorphin you may chase for some time. It’s like a toddler taking his first steps. The pride of it all! At first, your excitement is almost uncontainable. But like a storm in the night, comes the flurry of emotions. Fear, confusion, the what ifs, and what do I do next thoughts can become invasive. Take a deep breath. The homebuying process is a process. I think people tend to forget that.

Background Noise

In the background, your agent will be working. There are lots of moving parts to real estate transactions. She will be scheduling your inspection(s), coordinating the communication between all parties, including the lender and title company. You will have documents to sign and things to pay for.

And if you are financing this deal, that means there are several people party to the ability to close on time. The loan officer and the underwriter, the appraiser, the title company, the inspector, the responses from inspection– the list could go on. So let’s start from the top. Now that your offer has been accepted, here’s what comes next.

Contact your lender.

One of the first things you will do is send your lender a copy of the accepted offer, also known as the Executed Purchase Agreement. Now the lender knows you are officially ready to move forward with the loan process. Make sure that you have all documentation required of you. You want to be in the position where the lender is not waiting for you to do anything on your end.

Cut the check!

Remit your deposit payment to whomever will be holding the deposit. Oftentimes, it is the title company, but can also be one of the real estate brokerages involved in the transaction. Personally, I recommend that buyers have the title company, which serves as a third party, to hold the monies.

Get insurance quotes.

Start calling insurance companies to get quotes. If you’re in Louisiana, those calls should be made to both homeowner and flood insurance companies. Homeowner’s insurance pricing is going to rely on a number of factors, such as your property’s location. And don’t forget, pets cost money. Some policies do not allow certain animals, including specific breeds of dogs. And just in case you were wondering, there are a couple of things you can do to potentially lower the cost of your homeowner’s insurance, including installing a security alarm system and/or a fence.

Inspection/Due Diligence Period

While your agent will have scheduled the inspection, you will likely have to pay for it just after it has been scheduled or when the inspector arrives on site. Your agent is normally present for the inspection. Sometimes both the listing and selling (buyer’s) agents are there. Because the inspection can take a minimum of two hours, I tend to recommend the buyer not come, until towards the end, if the buyer chooses to come at all.

At the end of the inspection, the inspector will go over everything with your agent and discuss the most meaningful of his findings. From there, he will send you and your agent the report. In Louisiana, you are allowed 72 hours from receipt of the report to respond to the seller of the property with your decision. If you are satisfied with things as they are, then you simply sign off that you are ready to proceed with the Act of Sale, or closing. On the other hand, should you find that you are not content with the results of the inspection, your response can be handled in a number of ways.

One option is to ask the seller to address whatever issues you have with the property. You could also ask for a reduction in the sales price. Or, you can ask for cash at closing. If the amount of work is too much of a concern for you, you are able to cancel the deal, and get your deposit back without penalty.

Home Stretch

Assuming you are moving forward, you are now waiting on a few things. One, the results of the appraisal report– which has the power to kill a real estate deal. If the property appraises for more than what you are under contract for, then the transaction can proceed without cause. Contrarily, if the property appraises for less than what you are under contract for, your lender will rescind the pre-approved loan amount. At that point, you will have to either come up with more money to make the difference, renegotiate the price down with the seller, or the deal will be cancelled due to your inability to obtain financing.

Two, the title clearance. The goal is for the title to be free and clear. The title company will hopefully address any potential issues early on, such as a lien against the property or some far away heir that needs to sign off on the sale.

And finally, you are waiting on your lender to utter those magical words: you have been cleared to close. In other words, your loan has been underwritten and come back approved for funding. This information is then provided to the title company, and the title company schedules the closing date.

The Act of Sale.

Closing day has finally arrived. One thing I will say is, a real estate deal is not a deal until (and unless) it closes. Be prepared by readying all monies due. You should have wired your payment, or have your check in-hand to submit to the title office. At the closing table, you will present your ID, your money, and sign a bunch of papers. Sometimes, you may learn that some money is given back to you at closing, so the title company could possibly cut you a check! Sometimes. Don’t get too excited. Anyway, if you have successfully made it to this point, then Congratulations! You are officially a homeowner.

A Note: Do not make any large or excessive purchases, while you are in the process of buying property. Do not, do not, do not. If you need to make any large purchases, or take on any large debts, do it at the time the deal has closed. Not a moment sooner.

December 18, 2020December 18, 2020

5 Out of Pocket Expenses When Buying Real Estate

Little boy making a funny facial expression

Some people don’t realize there is more to purchasing property than just obtaining a loan and finding a house. You may not believe the number of people who don’t even think they need money down for a loan. Maybe you are one of those people. As a first-time home buyer, you simply don’t know what you don’t know. And if you haven’t purchased in a while, perhaps you don’t recall every step of the process. If you are interested in purchasing real estate, it is wise to speak to a licensed real estate professional in your area for more insight on what the home buying process entails. One of the most important things to note is that there are some expenses that you must pay directly. Here are 5 out of pocket expenses when buying real estate:

Pro Tip: It’s always a good idea to take a First Time Home Buyer’s Class. It will really help you understand the process more. Some lenders may even require it.

The first out of pocket cost is the deposit. The deposit, subtracted from the down payment, is any amount you choose to place with your accepted offer. Only after the deposit is paid, will the property to be taken off the active market. This lets the seller know you are committed or sincere about making the purchase. Whether you choose to put down $500 or $5000, that amount will be due within the next few days after your offer has been accepted.

Pro Tip: Although you can choose to remit as much or as little as you like, sellers tend to view an offer more seriously when they see that you have “skin” in the game.

The next out of pocket expense, which could be the largest, is the down payment. There are several different types of loan structures, but the most common types require some down payment. FHA loans, typically require 3.5% of the purchase price (the price you are paying for the property), while a conventional loan typically requires up to 20%. There are some loans that offer 100% financing, which means no money down (initially). Just keep in mind that there is no such thing as a free lunch. The down payment must be paid at closing, so be prepared.

Pro Tip: Regardless of your loan choice, you can always put more money down to lower your overall costs.

Probably the second out of pocket expense you will face is for the home inspection. If you are financing the purchase of a home, you will be required to have a home inspection. If you are paying cash for your home, be advised that you should definitely still get one. Once your offer has been accepted, your agent should schedule your home inspection as soon as possible. The price of a home inspection varies, and is contingent on the home’s size, but could be about $400+. The fees will be due either prior to the inspection, or immediately after the inspection is completed. That will depend on the inspector and/or inspection company.

Pro Tip: The home inspection doesn’t typically cover a video pipe inspection. The pipe inspection could be an additional $200 or more, again depending on other factors, such as location and length of pipes.

The next out of pocket expense due almost immediately after your offer is accepted is for the appraisal. The appraisers are chosen by your lending institution. If you are a cash buyer, or even a seller, it is still a good idea to obtain one. The appraisal can be helpful to a seller in determining your list price, or to a buyer determining purchase price. The appraisal can cost around $400.

Lastly, the final out of pocket cost we are discussing are the closing costs. Closing costs include the title attorney fees, document recordation with all appropriate parties, property taxes, insurances, etc. Both the buyer and seller are responsible for some closing costs. However, as the buyer, it is possible for you to show up to the closing table and have to pay nothing!

Pro Tip: Do your homework.

The outlined expenses may not be the only expenses you incur during a real estate transaction or process. This article should serve as a guide only, and not as all-inclusive. You will likely have other expenses, such as moving costs, and/or deposits that may be required for the opening up of utility accounts, and the like. Nevertheless, these 5 out of pocket expenses when buying real estate are very important to be aware of.

As we approach the new year, and new goals are set, many have purchasing property as a priority on their lists. If you don’t know any real estate agents personally, ask a friend or do a quick search online to find one. You can also contact me, and I can refer you to some agents in your respective areas. Reach out to a few, and move forward with who you feel most comfortable with. Let the agent know where you are in the homebuying process, and ask any questions you may have.

Pro Tip: There is no shame in not knowing, but it’s best to educate yourself as much as possible, even when you are working with an agent.

Realtor.com provides some good tips for first-time home buyers, as well. If you are looking to purchase property in Louisiana or Georgia, please feel free to send me a message here. I absolutely love assisting people with accomplishing their goals and building wealth in the process! Let me help you accomplish your goal in this new year. I’m ready when you are.

Tag: homeownership