Pocatello First-Time Home Buyer Guide

1.  What are the steps to buying a new home?

• Pre-Qualify.  First, pre-qualify for a home loan by meeting with a loan officer at a lending institution (ie. bank, credit union, mortgage company). Don't know where to go? Contact us, and we will be happy to direct you. The officer analyzes your income, debts, and credit history to determine your loan amount.
• Find a Home.  Next, contact your REALTOR® to start looking at homes. Knowing your loan amount, your real estate agent can show you homes in your price range, which you qualify to purchase.
• Make an Offer.  When you find a suitable home, your REALTOR® will help you make an offer by preparing a purchase and sale agreement to present to the seller and by holding your earnest money (see no. 4). The seller may accept your offer, reject your offer, or reply with a counter-offer (ie., a new offer made to you to negotiate on price).
• Attend Closing.  Once both parties come to an agreement, you prepare for closing. Your lender requires an appraisal to determine if the agreed price is reasonable. The title company performs a title search to guarantee the property is clear of liens (unpaid notes filed against the property). And finally, you attend the closing (usually at the title company) to sign the final papers.

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2.  When can I move in?

Once you have agreed to buy a home, it usually takes 30 days to close—the time is required for the appraisal, loan processing, title search, and so on. The actual number of days is negotiated with the seller. After closing, you can move in.

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3.  How much does it cost to use a REALTOR®?

Nothing! Real estate agents are paid a commission by the seller, so you don't have any costs apart from obtaining the loan and purchasing the home.

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4.  What is earnest money?

Earnest money is a deposit you put down at the time the purchase and sale agreement is signed to show the seller your intent to purchase the property. It is held by the real estate office and forwarded to the closing agency at the time of closing to apply toward your purchase/down payment. You only lose your earnest money if you breech the contract—back out of the deal with no legal basis.

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5.  "How much did this house appraise for?"

This question is among the most common asked by buyers looking at property. An appraisal is rarely performed at the time a house is put up for sale. Rather, the lender orders an appraisal AFTER the buyer and seller have agreed on a price to ensure the home is worth that amount.

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6.  Is there a warranty included with my home purchase?

Generally no, although there are companies that offer one-year warranty packages at an additional cost.

The biggest protection offered you when buying a previously owned home is the home inspection clause found in the purchase and sale agreement. This clause typically grants you 5–10 busniess days to perform an inspection on the home after agreeing to buy it. Some buyers perform the inspection themselves while others hire a professional inspector (at about $250–$275) to perform a 2- to 4-hour inspection of the property, providing an in-depth report on the condition of the home. You have the right, within the 5- to 10-day period, to submit a list of repairs you require to the seller. The seller may either perform the repairs or re-enter a negotiation phase with you. If no agreement can be reached, the contract is void, and your earnest money is refunded.

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7.  How much is my monthly mortgage payment?

Your monthly mortgage payment applies toward the following expenses:

• Loan.  The amount of principal and interest depends on the amount of money you borrow, the interest rate, and the term of your loan (usually 30 years). To perform some calculations, experiment with our mortgage calculator.
• Property taxes.  Property taxes are determined by the county assessor's office, based on the value of your property. In Bannock County, property taxes (with a homeowner's exemption) on a $100,000 property are approximately $110/month; a $200,000 property, $300/month; and a $300,000 property, $500/month.
• Hazard/homeowner's insurance.  Insurance will generally run between $250–$500/year depending on the size, age, and value of the home.

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