Is it time to purchase a house?
If you’re ready to pull the trigger, you can find answers to some basic questions about the process on the internet. Start with realtor.com and sfar.com, the websites of the National Association of Realtors and the Santa Fe Association of Realtors, respectively.
On those sites, you can research schools in Santa Fe’s diverse neighborhoods and begin looking at homes. Search for a mortgage calculator, plug in your income numbers and you’ll get a rough idea of how much you can afford to spend on a house.
If you’ve gone this route before, you’ll identify with the experience of Mary and Jay Jordan of Vail, Colo., who are in the process of moving into their new second home at 18 Mustang Mesa.
“I did do research, but I had been looking for a specific home for some time,” said Mary Jordan.
The Mustang Mesa house had recently come on the market and Jordan happened to be in Santa Fe. “I looked at it and bought it,” she said. “It was a full-price, and that is so unusual. But it was an immediate thing and I made it happen because Britt [Klein of Sotheby’s International Realty] brought it to me.”
For first-time buyers or others with less experience than Jordan, here’s a basic rundown of what to do after that initial internet research:
• Select a Realtor, ideally on the recommendation of friends or family. Then begin looking at houses. You can also visit Homewise (505-983-9473, homewise.org) and set up a meeting with a home-purchase adviser or attend one of the organization’s homebuyer education classes.
• Choose a mortgage firm or bank and sit down with a loan officer to get a financial preapproval.
“To begin the house hunting before knowing what you can afford can be a real downer if it’s discovered later that your dream home is out of reach,” said Realtor Melissa Adair, owner of TERRA Santa Fe. “Talk first with a loan officer where you bank locally since you are already a customer. If you aren’t satisfied with the rate and monthly payment you are quoted, talk with another bank or mortgage lender.
“Once you get a loan preapproval letter, you will be armed with an assurance to back up any offer you may submit, and this will strengthen your standing as a committed, serious buyer.”
• Choose the mortgage loan type that seems right for you. The two basic options are the fixed-rate mortgage, which can be locked at the current interest rate, and adjustable-rate mortgages that start off with a lower rate but periodically adjust to the prevailing rate, which may be much higher.
“When you find the house that speaks to you and decide to make an offer, your Realtor will prepare the paperwork and walk you through the offer process,” Adair said. “Once you have an accepted offer, ask your Realtor to provide a transaction calendar showing all upcoming dates and deadlines.”
• Review property disclosure or pre-inspection reports and if there are none, pay for a professional inspection. If there are problem areas in the report, your Realtor will negotiate how they will be cured.
“Understanding the condition of your home before you buy it is one of the most important phases of your home search,” Adair said. But she added most homes have some warts and scars.
“They are ever-changing with the weather and time and need regular care and maintenance, just like people,” she said.
• Pay for an appraisal.
• Purchase hazard (homeowner’s) insurance.
• Obtain from your mortgage officer and title company an estimate of the closing costs and what your monthly PITI — principal, interest, (property) taxes and insurance — payments will be.
• Do a final walk-through with your Realtor to make sure the house is in agreed-upon condition.
“Hopefully you are now feeling super excited and are picking out paint colors and furniture,” Adair said. “Owning a home is such a primal human need and desire. Home is the place we rest, rejuvenate after a long day’s work, spend time with friends and family, put down roots, and ground ourselves literally and spiritually. I hope your road to finding home is a smooth and gently curving one.”
• You and the title company will schedule the closing. After you sign all the final documents — there are lots of them — the deed is recorded and you’re handed the keys.