Owning your own home is part of the American dream. But yet there are so many people that are confused on why they should buy over renting. Here are 9 great reasons to buy your own house, rather than pay your landlord’s mortgage payment by renting!

• See owning as an investment.  – You are investing in you and your family’s future.  You are leaving your family an asset.

• Chance to build equity and credit. – You have a safety net in case of emergencies.  Build your credit for more financial stability and better rates on the things you want.

• Smarter/cheaper than paying rent.  – In most situations, paying rent is way more expensive than buying.  In essence you are paying your landlords mortgage and building his equity and credit.

• Nobody can tell you no! – Some rentals come with a hefty list of do’s and do nots..  For instance, if you have an unexpected addition to the family.. You could easily convert/build a nursery.  You don’t have to ask permission to paint or put a nail in the wall.  Most rentals don’t allow pets. Some allow small animals, but if you have a large family dog.. you can forget it.

• Ramp up energy efficiency – Save money and get tax breaks just for making your home more energy efficient.  Buying those new windows for your home may be written off at the end of the year.

• No Landlord can kick you out! – Suppose your landlord decides to up and sell the house you are living in.  You may have no choice but to leave, putting you in a unexpected financial burden you could have avoided by owning.

• Force Savings– Owning a home not only is cheaper then renting, it forces you to save money at the same time.  Your monthly payments are going towards equity that you can tap into for retirement, college expenses, etc. whereas rent just flies out the window.

• Steady payments that won’t go up. – Unlike rent where the landlord can increase prices on a whim, with a fixed mortgage payment, you know exactly what to expect each month, and each year.

• It’ll be yours– You can have the kitchen and bathrooms you want. You can move the walls, build an extension–zoning permitted–or paint everything bright orange. Few landlords are so indulgent; for renters, these types of changes are often impossible. You’ll feel better about your own place if you own it than if you rent.

• It’s risk capital– No, your home isn’t the stock market and you shouldn’t view it as the way to get rich. But if the economy does surprise us all and start booming, sooner or later real estate prices will head up again, too. One lesson from the last few years is that stocks are incredibly hard for most normal people to own in large quantities–for practical as well as psychological reasons. Equity in a home is another way of linking part of your portfolio to the long-term growth of the economy–if it happens–and still managing to sleep at night.

9 Reasons to Buy vs Rent

When you buy a house, it takes time, energy and focus to get through the process. Getting your loan pre-approval completed, finding a house, structuring a strong offer, and executing a sales contract can be exhausting. Once you have a signed sales contract in hand, it may feel as though your work is done; unfortunately, this is not the case. There’s still more work to do to get your transaction closed. See below a checklist for buying a home. The most common question that I hear once my buyers offer has been accepted is: “What happen’s next?”

MUST DO A.S.A.P!

Earnest Money

There needs to be some cash involved in the beginning of a transaction to protect the sellers interests while they take their house off the market. Earnest money is your proof as a buyer that you “earnestly” want to purchase their home.

Some REALTORS® will collect earnest money from you before they submit your offer. Others will coordinate the earnest money drop off after an offer is accepted. Whatever your scenario is, make sure that your earnest money is delivered on time and in the proper payment form. This information is usually documented in your sales contract.

Property Inspections

Once you have an executed sales contract in hand, the clock starts on your inspection period. Make sure you know how long your inspection period is, and complete your inspections in a timely manner. There are multiple types of inspectors that you may need to schedule. A standard home inspector is the most common, but radon, pest, septic, structural, HVAC, and mold inspections may also be relevant to your buying situation. Discuss your options with your REALTOR®. Make sure that you have resolved any inspection issues within the time allowed in your sales contract.

Check out this article by Bill Gassett, a top Massachusetts REALTOR titled “Home Inspection Problems The Inspector May Not Find“. It addresses many home inspection issues that you should be aware of.

Lender Documents

As soon as you have an executed sales contract, you will need to communicate with your mortgage lender so that they will start the mortgage process. Be prepared to provide lots of documentation throughout this transaction. Make sure that you get the requested documentation to them ASAP to limit any problems with their timeline. Some lenders are not as thorough with regards to checking in with you to keep you updated on their progress. Make sure that you are checking in with them to verify that they are on track. Your REALTOR® should help you with this as well. If a lender does not complete the loan process in a timely manner, it can cause you to be in breach of contract by not closing on time. If you stall on any requested lender docs, you can be sure that the finger will be pointed at you if they are not ready. Make sure that you are not put in this situation by promptly providing any documentation to your mortgage lender in a timely manner.

WHAT’S NEXT?

Title Commitment

This step is handled by the Title Company. They will issue a title commitment that reviews the title history of the property and discloses any liens against the property that need to be resolved before closing. Be sure to review your title commitment and ask an attorney for advice if you see anything in it that looks concerning. Most title commitments are straight forward and require no additional work on your part. Just be sure to review it thoroughly before moving on to the next step.

Appraisal

Once you have cleared the Inspection process, let your lender know. They will then order a home appraisal to verify that the value of the home your purchasing is worth the loan amount that you are asking for. In Colorado, appraisers have 10 business days to complete the appraisal, starting from the day it was ordered. For this reason, it is important to make sure that your lender orders your appraisal as soon as possible. It’s likely that you will be paying for the appraisal, so it’s best to wait until after you have completed the inspection process.

Check out this article by Anita Clark, a top Warner Robins, GA REALTOR titled “A Guide to Home Appraisals“. This article breaks down the appraisal process and explains how it affects your home purchase.

Home Owners Insurance & Warranties

Your lender will require you to have a Home Owner’s Insurance Policy on the property that you are purchasing. You will want to shop around and choose the home owners insurance provider and policy that works best for you. Once you have the policy in place, let you lender, REALTOR®, and/or title company know.

Also, some seller’s will provide an allowance for you to purchase a home warranty. If you are purchasing a home warranty, you’ll want to shop around and find the home warranty company that best suites your needs. Once you have found the right home warranty provider, be sure that the title company knows who you plan to use.

FINAL STEPS:

Turn On Utilities

Now that you are past all of the major steps required to purchase your home, you will want to get your utilities turned on, or transferred into your name. In Colorado, the sellers often provide all of the relevant utility contact info in the Seller’s Disclosure.

Schedule Closing Date & Time

Your sales contract will have an agreed upon closing date. Make sure that you and/or your REALTOR® have contacted the title company in advance to make sure they have a time slot open that is convenient for your schedule. Some sellers like to close at the same time as the buyers, so your REALTOR® may need to coordinate this with the listing agent as well. This is usually an easy step – just make sure that it doesn’t get put off until the last minute so that the title company can accommodate your request.

Final Walkthrough

It is wise to do a final walkthrough before the closing. The purpose is to verify that any repairs have been completed, that all of the seller’s personal belongings have been moved out, and/or to make sure that the home is ready to move into. This is not a time to renegotiate any items on the sales contract. It’s simply a safeguard to make sure that no major issues arise that could cause the closing to terminate; which would likely be followed by legal proceedings to mitigate the issues.

Check out this article by Kyle Hiscock, a top Rochester, NY REALTOR titled “Final Walk Through – What It Is and Why It’s Important“. It lays out the importance of a final walk through in an easy to follow format.

Close The Transaction

One the day of closing, you will need to have your driver’s license (or other approved photo ID) and certified funds (cashier’s check or wire transfer) for any monetary amount required from you at closing. You will meet at the title company to sign all of the required documentation. A typical closing usually takes less than an hour. Once the documentation has been signed and your lender has funded the transaction, you will be given the keys and the house it yours!