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Wanting to Buy, No idea what we are doing...

My fiancé and I are looking to purchase our first home. We have a house in mind, and know the current resident living there, we are scheduling a time to do a walk through this week since he is in the middle of switching agents. He made a comment that if we get a conventional loan, he will drop the price by 10k, it's currently listed for 85k.
This entire thing is spur of the moment for us, so we do not have a down payment of any sorts, etc, would that be required, would not having one hurt our chances?  We have already run pre-approved tests through a few lenders for this amount.

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July 16 2012 - Red Lion
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Answers (7)

Kitnerjr,

Have the lenders approved you?  If yes and the seller and you both have come to an agreement, you may be able to go to your states Real Estate Commission and down load copies of the state purchase contract, i.e. in Oklahoma FSBOs can visit www.orec.ok.gov to get copies of most forms used in the transaction.

The seller and you both can follow the guidelines of the purchase agreement and make it to closing on your own, by being patient and open w/ each party. 

If the seller and you want guidance in getting to closing, you can contract a local Realtor to guide you through the process. 

Hope this helps,

Josh Barnett, Realtor
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July 19 2012
There  are some down payment assistance programs going on in my state. You might try googling down payment mortgage assistance and your state to see if anything is out there for you.

Also, in addition to everthing else suggested, consider purchasing a home warranty. They really turn those scary massive repairs into a $75 or less service call. Good luck!
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July 19 2012
You need to get pre-approved by a lender and get an agent as soon as possible if the seller is serious. The lender will be able to tell you all of the information about financing and the different options that may work for you.  Your Realtor will then be able to walk you through all of the other details of the deal. 
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July 18 2012
The first step is to be pre qualified with the lender of your choice. Once you know where you're comfort level is financially and you have a pre qual from your lender, interview several agents in your area and choose an experienced agent to work with.They can show you comps for the area, help you determine a fair market price and help guide you through the contract and inspection periods. A good agent has your interests at heart and will be an invaluable tool in helping you see a successful close of escrow.

Good luck!

Team Kern
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July 16 2012
Profile picture for sunnyview
It can make the process less work on your end, but you don't have to go through an agent. I make sure that you use a standard contract and consider either paying an attorney to review it or having a local flat fee real estate agent do only the contract piece once you have settled on a fair price. Look at the recent closed sales in the area and look at the local price trend information on Zillow, Trulia and Realtor.com.

It is smart to make sure that the property is worth what you are offering so as long as you get an appraisal that is covered. Glad to hear that you're getting an inspection. Many have had good luck with ASHI qualified inspectors and they also have a list of interview questions on that website for finding a good inspector.

Since it is your first house, you might consider asking the seller to pay for a home warranty. They run about $300 and if something does fail like the heater they cover a lot of systems in the house with just a service call fee for $25-70 even if the repair is big. They can be nice until you get to know the home better and can be a cushion if s major system does fail in the first year.
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July 16 2012
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Of course we will get it appraised, and would have everything inspected, etc. We have run through numbers of the "what if's", and what it will cost us for mortgage, taxes, etc, and we are fully able to afford it, especially being that we are paying double in rent at the moment that it would cost to own a house. I have brought up the possibility of something happened, ie, heater going out, can we afford to fix something like that? But with the money we will save over renting, there will be a lot extra to put aside.

Is it better to go through an agent?
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July 16 2012
Profile picture for sunnyview
Unless you are planning on doing a VA loan or the property qualifies for a USDA loan, you will need a minimum 3.5% for an FHA loan. I think that the minimum down for a conventional loan is 5%, but you could ask a lender about that.

FYI you should not buy this house without an appraisal. Many first time buyers without an agent feel that they can skip this step especially if the owner if offering to carry back a mortgage, but it is a mistake. You need to know that the house that you are buying is worth what you are willing to pay. I would advise having any contract that you plan to use reviewed so you understand exactly what it says. To be safe, I would also have any earnest money deposit held in escrow with the contract and not by the owner.

There is more to buying than the purchase price. You need to make sure that you have the financial stability to deal with your mortgage, property tax and insurance payment and any unexpected repairs that might arise. Zillow is a great place to ask questions that you have and get links to sites that might be helpful and get more information before you buy.
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July 16 2012
 
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