What Contingencies To Include In Your Home Purchase Offer

After days, weeks, or months of searching the homes for sale at the Lake of the Ozarks, you've finally found your dream home! Now it's time to begin the process of negotiating the sale so you can work towards making the home your own. The first step is submitting an offer detailing your suggested terms of the sale. A good offer contains several important components. This week, we want to look specifically at one such component: contingencies.

What Are Contingencies?

When A is contingent upon B, it means that A will only happen if B does. In a real estate purchase agreement, including contingencies means that your offer will only remain valid if certain conditions are met. This allows you to back out of the agreement if other parts of the process fall through or reveal information that changes how you feel about the purchase.

Common Contingencies To Include

There are several different types of contingencies that may be included in your home purchase contract. Here are a few examples of some of the most common ones.

Inspection Contingency
The home inspection is a critically important part of the home buying process. During the inspection, a professional inspector will thoroughly evaluate the home from top to bottom, inside and out. If the inspection report reveals something that is not up to code, in poor condition, and/or requires extensive and costly repairs, you may not wish to purchase the home as is. This contingency may allow you to negotiate the repair into the sale or potentially back out of the agreement entirely.

Financing Contingency
Even if you already have a pre-approval letter from your mortgage lender, the financing will not be official at the time that you submit your offer. While it may not be likely, there is always a small chance that something will fall through and you may not be approved for your loan. If you are not able to get the financing required to purchase the home, this contingency will allow you to back out of the sale.

Title Contingency
When you submit an offer, you will have to specify which title company you would like to handle your transaction. The title company will then conduct a title search to identify any potential issues with the title. In some cases, issues may be revealed that you don't want to deal with. The current owner may have an ex-spouse who still has some claim to the title, for example, or you may learn that the person trying to sell the property actually has no legal claim to the title. The title report may also reveal any outstanding liens that need to be resolved.

House Sale Contingency
If you have a current home that needs to be sold before you can purchase a new one, you may want to include this contingency. If your ability to purchase your new home will be dependent upon the sale of your existing home, this contingency can provide valuable protection. However, it is worth noting that this contingency is not always as common and may discourage sellers from accepting your offer simply because they may not feel as confident about the sale going through.

Designing Your Real Estate Purchase Contract

These are examples of a few common types of contingencies, but there are several other ones that may be beneficial depending on your unique situation. When you are ready to submit an offer, your Lake of the Ozarks real estate agent will help you determine which contingencies to include and how to structure your purchase agreement so as to best protect your interests. Visit our website to learn more about our real estate resources for buyers.

The Property Shop at the Lake

2086 Horseshoe Bend Parkway

Lake Ozark, MO 65049

(573) 693-1100

(573) 480-7760

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Interest Rates: How They Impact Your Purchase

If you're new to the real estate market, you have a lot to learn before your buy your first house at the Lake of the Ozarks. With so many different aspects and all of their accompanying details, it can be a lot to take in all at once. At The Property Shop at the Lake, we make it a point to help our clients get all of the information they need to make educated decisions. This week, we're here to help you to learn more about interest rates and how they impact your home purchase.

Why Interest?

When you purchase real estate at the Lake of the Ozarks, you are not the only one who is making an investment - your mortgage lender is making an investment, too. When you buy a house, your lender is the one who pays the seller outright (by loaning you the money). Your mortgage payments over the next fifteen, twenty, or thirty years go towards paying back that loan.

This process allows you to reap several rewards, such as having a place to live and accumulating the "forced savings" that come from building equity in your home. By charging interest, your lender gets a reward, too - they make money off of their investment. It's a symbiotic relationship; by working together, both parties benefit.

What Are Interest Rates?

Interest is the money the bank makes off your mortgage loan, and interest rates are the factors that dictate how much money that is. Interest rates are a percentage of the total purchase. Currently, rates range anywhere from approximately 2.98% to around 4.16%. The exact rate you can get will depend upon several different factors, such as the type of loan you get, the duration of the loan, your credit history, and more.

How Much Will Interest Rates Really Affect My Purchase?

Your interest rate will have likely have a huge impact on the affordability of your home, as it will impact how high your monthly payment is and the total dollar amount you will end up spending on the home. Consider this graph:

Source: KeepingCurrentMatters.com

NOW Is A Great Time To Buy!

As you can see from the graph, interest rates are currently at an all-time low, which means it's easier to afford more expensive houses. While it is impossible to predict whether the rates will lower or raise in the future, our Lake of the Ozarks real estate agents believe that it is always better to be safe than sorry! If you are thinking about purchasing one of the homes for sale at the Lake of the Ozarks, let us help you get the process started. You don't want to risk the interest rates rising before you get the chance to buy!

The Property Shop at the Lake

2086 Horseshoe Bend Parkway

Lake Ozark, MO 65049

(573) 693-1100

(573) 480-7760

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Top 5 Reasons To Own Your Own Home

The lease is almost up on your apartment, and you're faced with what feels like a massive decision: do you sign another lease, or do you take the plunge and buy your own home at the Lake of the Ozarks?

Buying your own home is a big step and can definitely feel a bit unnerving, especially for first-time home buyers, but countless resources show that owning your own home is a much better option than renting. Here's a quick look at a few of the top reasons to own your own home.

1. Owning Your Home Helps You To Invest In Your Future
When you write that monthly check for rent, you're sending money off to someone else knowing that you will never see a penny of it again. When you make your monthly mortgage payment, however, you're putting money towards your biggest investment. Unlike your apartment, the money you spend on your home is still yours - and it can come back to you if/when you decide to sell your Lake of the Ozarks home in the future.

2. Owning Your Home Promises Stability
When you rent, you subject yourself to the whims and desires of your landlord. If you're renting a house, for instance, the homeowner could eventually decide to sell the property and not give you the opportunity to renew your lease when it is up. If you're renting an apartment, the property association may raise your rent payments in order to cover their new construction costs. When you own your own home, however, no one else has control over the property - and if you got a fixed mortgage payment, you can be confident that your payment is never going to increase. 

As a homeowner, you are also more likely to stay in the home for several years. If you are raising children, this extra stability can be a great asset - children (especially young ones) manage much better in stable, consistent environments.

3. Owning Your Home Gives You Freedom
Are you tired of looking at the same dull wall color or the old, boring faucets in your master bathroom? Most apartment complexes have strict rules that restrict their tenants from repainting or making other changes the living space. As the owner of your home, however, no one else can place these types of restrictions on you. Want to paint your kitchen bright yellow? Want to splurge on beautiful hardwood flooring? No one can stop you!

4. Owning Your Home Allows You To Choose Your Lifestyle
It's very common for apartment or condominium complexes to have strict pet and smoking policies that limit (or altogether prohibit) their tenants' ability to own a pet or smoke in their homes. As a homeowner, you are the one who gets to choose whether or not you smoke and how many pets you wish to have in your home.

5. Owning Your Home Saves You Money
This may seem counter-intuitive, but more and more studies are showing that owning your own home is actually much cheaper than renting. You could own a 3,200 square-foot home at the Lake of the Ozarks and pay only $1,200 a month on your mortgage payment, but your rent payment for that same home could be as high as $1,400 or even $1,500. Not only is your monthly payment lower as homeowner, then - you're also spending that money on your own asset rather than someone else's.

Convinced? Contact The Property Shop @ The Lake To Find Your New Home Today!
Are you ready to buy your first home? The team at The Property Shop would love to help guide you through the process! Our team is comprised of several experienced real estate agents who have the knowledge and the expertise you need to find your dream home at the Lake of the Ozarks. We are excited to work with you!

The Property Shop at the Lake

2086 Horseshoe Bend Parkway

Lake Ozark, MO 65049

(573) 693-1100

(573) 480-7760

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