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A Newbie's Guide to Buying a Townhouse

BY: Maya Philippines | Category: Finance | Submitted: 2011-01-21 07:20:28
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Article Summary: "A lot of consideration and actions are needed in order to purchase a townhouse. Each and every one of them needs to be done carefully in order to get the best of a townhouse..."

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Townhouses are always the choice of first time buyers. Buying a townhouse is likely done by young executives with enough money but no time to work on the garden, or the house itself for that matter. They want their own place, not a place with rent and landlord or landlady, a good investment and yet, not a burdensome palace.

Buying a townhouse is a process a first buyer needs to familiarize first as it involves quite a lot of things to do. The things required for the process include pre-qualification for a mortgage, real estate agent and an inspector.

Prior to the actual purchase, a house buyer goes through a process of acquiring approval from a mortgage company. In this process, the mortgage company asks for social security number, bank statements, several years of W2s, verification of income, driver's license.

Mortgage company also checks buyer's credit and FICO's score to estimate the risk in giving a buyer credit. All of these need to be in order for a buyer to be pre-qualified for a mortgage, as well as an estimate as to how much of a loan a buyer is entitled to.

Getting a real estate agent is the next step once a pre-qualification is required. A licensed real estate agent is best found through recommendation. Word-of-mouth advertising plays a significant role in buying a townhouse. Going with a totally unknown real estate agent may cost a buyer a lot of money in terms of nonreturnable investment, a high amount of repair cost or unfair price. Relatives, friends and coworkers are ideal sources to go for recommendation of a good real estate agent. Equally important is the practice of vetting the numerous recommendations and form one's opinion. A good real estate agent is also going to check and require a look at the pre-qualification statement from buyer's mortgage company.

Once a real estate agent is engaged, the process of viewing begins. The real estate agent usually begins by asking the specifics a buyer might have in mind about his or her future townhouse. The agent then conducts a search on Multiple Listing Service for possibilities, which are then compiled for buyer's perusal, either via email or face-to-face meeting.

When a choice is made, the real estate agent helps the buyer write up a price offer. When the seller agrees to sell at the offered price, the real estate agent also helps in setting the date for closing the transaction. To get to the point where a seller agrees to an offered price, however, may take several offers and negotiations and re-negotiations.

A period of time is set aside for buyer to conduct inspection, to reassure that the property is in reasonably good condition, to assess the cost of any repair which needs to be done as well as the cost of any improvement or renovation a buyer may wish to do. A good real estate agent usually supplies his or her client with a purchase option. With a purchase option in hand, a buyer faces no penalty should he or she choose to opt out of the purchase contract if the result of inspection is not favorable.

Closing basically means the signing of all necessary documents to prove the purchase. Closings are usually done by both the buyer and seller on the same day, albeit different time. Keys to the house, however, do not change hands until funds are transferred from the mortgage company.

A lot of consideration and actions are needed in order to purchase a townhouse. Each and every one of them needs to be done carefully in order to get the best of a townhouse.

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