Determine How Much You Can Afford
Determine How Much You Can Afford
How much house you can afford is largely dependent on how much cash you have available. Mortgages are not generally available in Mexico at interest rates that foreigners will agree to pay (think double digit.)
In addition, purchasing a home involves more than just making sure you have enough money to pay the price and property tax. You'll also have to be sure you have enough money at hand for what are known as closing costs. Closing costs could include:
- Earnest money, usually five to ten percent of the cost of the house, which you pay as a deposit on the house when you submit your offer. It’s your proof that you’re a serious buyer. You may be able to get this money back should you decide not to purchase the house, but you must make this decision within about two weeks of paying the earnest money. It is usually conditione don your approval of a home inspection, title report and reveiw of the Seller's documentation.
- Your balance of payment (this is different than earnest money), usually 90-95% percent of the cost of the house, which you must pay at closing. Understand that in today's market, home owners are leery of granting a mortgage for potential homeowners who don't have 50% percent available for a down payment.
- Closing costs, usually three and a half to five percent of the cost of the house, to pay for processing all the paperwork.
In addition, as you research whether you can afford to purchase a home, don't forget to include the day-to-day expenses you'll incur. This includes.
- Homeowner or condo association dues
- Property taxes (mentioned above)
- City or county taxes
Shop for a Home
Shop for a Home
House or land hunting can be both exciting and frustrating. You should plan on seeing at least 10 homes or lots before buying one. To make your search easier and faster, browse properties on the Internet. You can do so on my real estate home page. Clickon the "Search For Homes" link and you will have access to the same data as Realtors from the State of Baja California Sur. For Los cabos information ,click on the link "Here" on my homepage. This information is up-to-date and accurate. Other real estate websites do not provide up-to-date data and lag behind my site. The Internet is a quick way to see whether the houses that are currently available meet the following critical criteria: are they in the right location, with the right features and at the right price.
If you find after your search on my website that few properties meet your needs, you may want to readjust your criteria – change the location, features, price – to increase your chances of finding a house that works for you. If you have any difficulties in this initial search, feel free to contact me for assistance. Homes can become available instantly and I'm always the most current resource for up-to-the minute information on new home listings. Once you know what you want, where you want it and what you can afford, it’s time to start looking for a real estate agent or Realtor so that you can see different houses for yourself. Before you and an agent/Realtor go to the homes, it's a good idea to put together a checklist of things that you’ve decided ahead of time are important qualities of your future home.
This might include:
- Is there enough room for your family to grow in the house?
- Is the house structurally sound?
- Is the house in move-in condition or will it need work?
- Is it close enough to everyday needs, such as grocery stores, schools, work?
- Will you feel safe here?
- Do any appliances included in the home work?
- Is the yard right for your needs?
- Do you like the floor plan?
- Is there enough storage?
- Will you be happy in this house in winter, summer, spring, fall?
You may also want to take some exterior and interior photos of each house you visit so that you can keep track of its pros and cons.
Find a Real Estate Professional...That's where I come in...
While you’re not required to use a real estate professional to purchase a home, it is a good idea. A professional has access to a network of contacts and can draw from extensive market knowledge to help pinpoint the right house for you quickly.
A professional also can help you structure your deal to save money, negotiate the sales and closing details, explain the advantages and disadvantages of different types of mortgages and guide you through the paperwork.
Mortgages- That is, Global Mortgage or Seller Financing
This is a cash market. That is the Mexican tradition.
However, many sellers are carrying loans for their buyers, and we have handled many of these. It is important that all conditions and potential circumstances are contemplated and put into the agreements. Sellers genearally get 50% down payment, carry the loan for 2-5 years maximum at low interest. But you need to anticipate who will collect and document payments, how will you get the Seller to sign a Satisfaction Of Mortgage and what to do if somebody dies in the meantime. We have been through this before and will help you get it all documented.
We also have a relatively new player in the mortgage market, Global Mortgage. They are doing mortgages the right way, and have an excellent staff. W ecan hook you up and watch your transaction progress together online.
Make an Offer
Make an Offer
When you’ve found a house you really want, it’s time to make the offer. How much you offer may depend on a number of factors:
- Is the asking price fair? Here’s where the legwork you put in while shopping for a home pays off. Decide whether this house is priced right or out of line in the current marketplace. We can look at what are known as "comparables" to help determine if a home in which you're interested is priced "right." Comparables are simply the prices homes near the house you're interested in sold for in recent weeks and months. Comparables can be wonderful tools when it comes to negotiating a sales price: "You're asking $400,000, but the house up the street built the same year with the same square footage sold a month ago for $375,000."
- Is the house in good condition? Is this house in move-in condition or will it need a lot of work? Take any costs of improvement into consideration when deciding your offer price.
- Has it been on the market long? Usually the longer a house has been on the market, the more likely it is the owner will accept a lower offer. Or it may be just overpriced for the market.
- Is it a seller’s or buyer’s market? If the houses you’re interested in are being bought as soon as they’re listed, that means you’ve got a lot of competition from other buyers; offer accordingly. If houses aren’t selling fast, you may have more leverage in negotiating a lower price.
Once you’ve determined how much you’d like to offer, work with your real estate professional to submit the proper information. This includes:
This can be just the beginning of the negotiation process. The seller has three options: accept your offer, counter your offer, or reject your offer. I'll strategize with you on the best way to present your offer for a good outcome.
- A complete, legal description of the house
- The amount of earnest money you’re paying
- The down payment and financing details
- A proposed move-in date
- The price you’re offering
- A proposed closing date
- The length of time your offer is valid
- Details of the deal
Begin Contingency Period
When your offer has been accepted, the contingency period begins. This is time that allows you to obtain financing, perform inspections and satisfy any other contingencies of your purchase agreement. Obtaining financing might include loan approval, which will include an appraisal of the property. Also be prepared to make your down payment, which is usually due several days before the close of escrow. Now is the time to schedule a professional inspection of the property; it is one of the best safeguards you can take before buying.
A home inspector should check (and may give you a rough price for repairs on) the electrical system, plumbing and waste disposal, the water heater, insulation and ventilation, water source and quality, pests, foundation, doors, windows, ceilings, walls, floors and roof. Keep in mind that the inspector isn’t there to tell you whether you’re getting a good deal. He or she is there to give you an educated opinion on whether the house is structurally and mechanically sound and fill you in on any repairs that are needed.
A title report should be performed to check that all paperwork of teh Seller is in order, or to give guidance on what needs to done to make things acceptable. the cost is about 4440 US, money well spent to assure good sleep!
Buy Homeowner’s Insurance
A paid homeowner’s insurance policy is NOT required at closing, unless required by your lender.
Complete Settlement or Closing
When the property you’re buying has been inspected and you’ve had your final walk-through of the property to see that all contingency conditions – such as final repairs made by the seller -- have been met, it’s time to face the paperwork. You, or your legal representative, will be signing loan documents and closing papers at the Public Notary's office, paying the balance of your down payment and closing costs. This is the day you get the keys to your new home. Congratulations!