2023 is a good time to buy a home in Connecticut. Interest rates have climbed but they are still at historic lows! The inventory is low but the Spring market is projected to be good, not crazy so the bidding wars won’t happen on every house. (We hope!) Sellers are still in the process of getting their homes ready for the market. I am happy to guide you through the home buying process whether you are a first-time homebuyer or a seasoned veteran.

Buying a home can seem a bit intimidating- especially if it is your first time or if you are new to an area. One of the things I strive to achieve is to make your home buying experience as smooth and understandable as possible. Since I grew up in New Canaan and know all the surrounding towns as well, I have the knowledge base that will be very helpful in your home search.

Before you start looking for Connecticut real estate there are several things you can do to help prepare yourself for a smooth and most productive home search.

Make a list of criteria you would like in your Connecticut home. Break down the items on your list into three different categories:

• “Must Have’s” - Things that you must have to even consider a home. If you absolutely, under no conditions, would consider a house without these items, they go in this category.
• “Should Have’s” – Things that you would prefer to find in your next house but could make do without if there was a compelling reason.
• “Dream Items” – They don’t call it a dream home for nothing, what are some of the things you have always wanted in a house?

Creating this list will help to formulate the things that are most important in your next home and will also help you to realize those things that maybe weren’t as important as you might have initially thought.

One of the most important parts of buying a home is making sure you can get a loan in the amount that you need. No seller will accept an offer without a Pre-Approval letter. (Better yet, a Certified Pre-Approval letter!) Speaking with a loan officer at the beginning of the process can be helpful for a number of reasons:

• You will find out what you can afford with the current interest rates
• You will find out what types of mortgage products are available
• You can target houses which fit your budget more accurately
• You won’t fall in love with a home only to find out it’s currently out of your reach

Obtaining a mortgage can be a very important part of the home buying process. While some Connecticut buyers may look at it as a daunting task, with a little guidance and the right loan officer this process can be made much more understandable and stress-free. One thing to understand is that there isn’t just one type of mortgage. In this respect, mortgages are like shoes. There are many different kinds of shoes, dress shoes for work, flip-flops for the beach, boots for the snow, sneakers for running etc. In a similar way there are many, many different kinds of loans available each with a different purpose. It makes sense therefore to speak with several different lenders not only to find out which offers the product that fits you best, but also to see which loan officer you can work best with.

I know some excellent mortgage brokers! Please ask me.

Closing costs vary based on a number of factors. Below are what you can expect to pay for when you buy a home in Connecticut, but don't hesitate to contact a Connecticut Real Estate Attorney so you know all the up-to-date laws that could impact these costs.

Your closing costs will include:

Items Payable in Connection with your Loan

• These charges vary widely by lender and obviously do not apply if you are not obtaining a loan for your purchase. They include things like a credit report fee, appraisal fee, origination charge, flood certification fee and others depending on the type of loan and lender.

Escrow Payments

• Some lenders require that the buyer escrow money for certain things like property insurance and taxes. An escrow account is simply an account for the buyer that the bank uses to pay the property taxes and homeowners insurance when those bills come due. For those buyers who have escrow accounts, they generally are included in the mortgage payment so the buyer writes one check to the lender which gets broken out into the principal payment, interest payment and escrow payment.

Attorney’s Fees and Title Insurance

• In the State of Connecticut real estate is conveyed with the help of attorneys, not title companies. As a buyer, you have the option of choosing your own attorney to represent you in the purchase of your home. For their services the attorneys do charge a fee that depends on several factors.
• Most of the time the lender will require that you purchase a title insurance policy at least in the amount of the loan you are borrowing. Your attorney can discuss with you whether or not you would like to purchase an “Owners” title policy to cover you for the full value of your home. The title insurance policy is protection from defects in the title which could cause problems either while you own the property or when you go to sell it in the future.

Recording and Transfer Charges

• Once it is official and you have signed the deed, the title, note and mortgage all get recorded on the land records at the town hall (in the town where the property you are purchasing is located). Town halls charge to record these documents based on length.

Real Estate Property Taxes

• Since Real Estate Property Taxes are paid in advance you will most likely be reimbursing the seller. Real Estate Property Taxes are paid in January and July so if the annual tax bill for your home is $20,000 that breaks down into 2 payments of $10,000. If you closed on March 31st, you would reimburse the seller for the remaining 3 months (April, May & June) for which they paid, but will not have owned the house. The tax adjustment varies based on the month of the closing, but is usually one of the larger line items.

Reimbursements

• Just like you reimburse the seller for taxes that they paid for in advance, it is also customary for the buyer to reimburse the seller for other items they pre-paid. Most commonly these include oil, if the house is heated by domestic heating oil, or propane if it is heated with propane, has a propane range or fireplace, condominium monthly fees if it is a condominium or other special rents or dues depending on the location of the property.
• Even though there are many different kinds of loans they all carry a term (the lifespan of the loan) and a rate (the amount of interest charged on the principal balance you borrow).
• Term – The longer the life of the loan, the more payments you have to amortize the principal balance. To say it another way, the longer the life of the loan, the smaller the payments towards principle. Most commonly buyers seek out a 30-year amortized loan, but in certain situations 15-year, 10-year and even 5-year amortizations also work. Your loan officer will help you to determine what works best for your needs and situation.
• Rate – The rate on your loan could be either fixed or variable. A fixed rate loan has a rate that doesn’t change for the life of the loan. A variable rate loan has an interest rate that starts at one rate, then can fluctuate either up or down based on the index to which it is tied. Again, your loan officer will be very helpful in helping you to determine which is more appropriate and advantageous in your case.

Timeframe
Please let me know the homes you would like to see a few days ahead of time. Many sellers require at least 24-hour notice.
Many Sellers have restrictions about times the house can be shown. An example, which I see all the time is “Nap Time”. We just can’t mess with that!
How long do you think you will need at each house? This is important to know when I am setting multiple appointments.

Feedback
Sellers are excited you came to see their home. They most likely cleaned up and made it look it’s best. They really want to know how you liked it. Please let me know after a showing, so I may let them know. They want to hear both negative and positive. It is hard being a seller and this really helps them to understand what the buyers are looking for.
After getting home and thinking about it, shoot me an email with your thoughts on each home. It doesn’t have to be an essay, and couple sentences on each property are just fine.

Curb Appeal
My buyer’s pick the homes they want to see mostly from the Internet. Sometimes when we arrive at a property, they say, “Let’s skip this one!”
Try to remember you chose it for a reason and maybe what is on the inside will outweigh the outside. I convinced my buyers to go in and take a peek. The next appointment is usually half hour later and we can’t just show up early. One buyer that wanted to skip, went it and loved it and bought that home! They added a wraparound porch and it looks like the most welcoming Farmhouse that you ever saw!

Do You Love It?
Twice in my real estate career the buyers I was working with clints that fell in love with the first home they saw. They thought that since they just started the process, they would be crazy to act on a property so fast. They needed to educate themselves and see many that were on the market. I am happy to show you as many homes as you would like but remember you don’t always “fall in love” with each house. When you know – you know! I worked with one of those couples for three years and the other for five years! They compared every house we looked at to that one. It was heartbreaking.

During this Winter of 2023, because of low inventory, buyers have to come in with their best foot forward! What does that mean??

Do you have the ability to make a cash offer? One client was so sure they could get their mortgage that they waved the Mortgage Contingency. (They also had a parent that could back them if for some reason it didn’t work out.) We are not all that lucky but getting a Certified pre-approval letter is the next best step. Talk to your mortgage contact about this. Have it ready before you start looking. Otherwise, you might lose a house that you love. That is not something I want to happen to you.

It comes down to this . . . if you make an offer without a pre-approval letter, you won’t get the house.

This past year, in Fairfield County, there have been multiple offers on every house and sellers are able to be very particular about who they decide on.

Things you need for an offer

1. Offer letter – Memorandum of Terms
2. Pre-approval or proof of funds letter
3. A copy of a check for 1% a good faith symbol
4. Signed Disclosures, both property disclosures and lead if built before 1978. Most buyers waive lead inspections because all older homes have lead paint. I am told it is only dangerous if chipping and falling to the ground. Ask your building inspector for more info.

Some buyers are waving their building inspection contingency. I don’t recommend this but I do recommend stating in the offer that you are planning on standard building inspections but will only ask for the seller to resolve only “major, health or safety issues”.

Once you have an accepted offer you need to schedule building inspections right away. The sellers want the building inspection contingency removed as soon as possible. You should be there during the building inspection because you will learn about the systems in the house.

Ask me for the list of building inspectors in the area.