Home Buying Guide in Northern Virginia

The real estate market in Northern Virginia (NV) is continuing to be dominated by aggressive sellers, and the region’s low inventory is finding it difficult to keep up with the rising demand from buyers.

Here is a buyer’s guide to the home-buying process in Northern Virginia, in the event that you are considering making that move!

1. Determine Your Budget

Before beginning your search for the home of your dreams, you should first establish a budget that is reasonable. This budget should take into account what you are currently able to pay as well as how far you are prepared to go to meet your goals. In general, lenders want applicants to have a total debt loading that is lower than or equal to forty percent of their gross monthly income (this is called the debt-to-income ratio). This total takes into account all of your obligations, including payments on credit cards, auto loans, and student loans, as well as upcoming payments on your home. If you are thinking about buying a condo, you will need to take the monthly HOA fees into consideration as well.

Prices of homes and other real estate in Northern Virginia can range widely depending on where you search. For instance, the price of real estate in Alexandria in September 2021 was $550,000, while the average price of a property in Fairfax was $616,000, representing an increase of over $60 over the previous month.

You can evaluate what you can afford by using one of the many helpful calculator tools that are available to you online. If you realise that you have reached your limit, you should immediately begin making preparations to lower the proportion of your debt to your income.

2. Make a plan for your initial deposit.

The majority of conventional mortgages call for a down payment of 20%, and if you are able to put up that much money upfront, it is in your best interest to do so. You’ll be able to avoid paying private mortgage insurance (PMI) if you put down at least 20% of the purchase price, which will bring down the overall cost of your loan and help you qualify for a better interest rate.

However, if you are not quite capable of saving that much, there are a variety of programmes that can aid you in making up the difference. The down payment on an FHA loan is only required to be 3.5% of the total loan amount. However, programs such as this do involve PMI, which might result in your monthly payments becoming significantly more expensive.

The United States Department of Housing and Urban Development (HUD) is able to give a list of nonprofit house purchase programs for each state, including one specifically for the Commonwealth of Virginia.

The Virginia Housing Development Authority (VHDA) provides loan programs that are customized to first-time buyers as well as programs for buyers who wish to purchase property in places with economic opportunity. Both of these loan programs are available through the VHDA.

When you are planning for your funds, it is important to remember to include the expenditures associated with closing in your strategy. These are fees that are paid at the time of closing, and they normally amount to around 2% of the purchase price of the property. Also, keep in mind that lenders prefer to see consistency in your account’s funds – preferably for sixty to ninety days before to submitting an application, this should be the case.

3. Rank the Order of Your Real Estate Requirements

When deciding what aspects of your new home are most important to you, there are a lot of considerations to take into account. Is it important to be close to one’s place of employment? What about a sizable outside space? Is it crucial to have a location that’s close to the subway? Perhaps you place a high priority on attending highly regarded educational institutions. Or, perhaps you are in the process of choosing between a houses that has recently been constructed, the ease of living in a condominium, or an established single-family home.

When it comes time to make a purchase, Northern Virginia has a wide variety of real estate options to pick from; but, if you give careful consideration to the things that are most important to you now, you will be in a much better position to choose the right home.

Your real estate agent will have an easier time finding the ideal home for you if you are specific about the requirements and objectives you have for the property. However, if you are having trouble deciding what aspects of a home are most important to you, speaking with a real estate agent who specialises in the region in which you are interested can be of great assistance.

4. Obtain a Pre-Approval for Your Loan

The vast majority of sellers in Alexandria, Fairfax, Arlington, Washington DC, and Loudoun Counties will not accept any bids from buyers who do not possess a pre-approved loan for the purchase of their property. A pre-approval letter makes it very evident that a buyer is in possession of the financial resources necessary to support their offer.

Therefore, choose a lender, and make sure you get pre-approval. In order to make an accurate assessment of your financial status, they will first ask you to provide all of the pertinent financial data, such as pay stubs, tax returns, bank statements, loan statements, and so on, and then they will check your credit.

Keep in mind that just because you have been pre-approved for a certain amount does not necessarily indicate that you will be able to pay that amount without experiencing financial hardship. Spend some time doing the math to come up with an accurate estimate of the amount of money you will need to spend each month on your own personal budget.

5. Make a Deal with Them

After you have narrowed down your search to the perfect home, your real estate agent should guide you through the process of determining how much to offer and which, if any, contingencies to include in your bid. When assisting you in determining how much of an offer to make on a property, an experienced agent should take into consideration a comparative market analysis.

A residential sales contract and an appraisal contingency addendum are typically included in the standard set of documents that make up an offer package for a house in Northern Virginia.

• A buyer’s finance pre-approval letter

• An earnest deposit (a personal check for one percent of the property price)

• A home inspection report with a radon testing contingency.

• An earnest deposit (a personal check for one percent of the property price).

6. Go Into Escrow

When both the buyer and the seller have reached an agreement on all of the terms, the purchase contract will be ratified, and escrow will be initiated. After the ratification of a contract, the typical wait time before settlement is between 30 and 45 days.

7. Carry out a comprehensive home inspection.

After the contract has been finalized, it is strongly suggested that you arrange for a home inspection to be carried out. This will provide the opportunity to conduct additional inspections for flaws, to request that the seller pay for any necessary repairs, and even to back out of the deal entirely in the event that something significant is discovered.

8. Complete one last tour of the area

The pre-settlement property access law in Virginia enables prospective purchasers to schedule several inspection walk-throughs within the final week before the closing date of the transaction. This gives you the opportunity to check that the property is in the condition that you and the seller have discussed and agreed upon.

9. Put Your Name on the Papers

The final documents need to be signed by all parties involved, and this process is often carried out at the office of the title firm. Make sure that you bring your identification with you, as well as a certified or cashier’s check to pay the remaining balance of the down payment, as well as any other charges associated with the closing.

After that, the keys will be delivered to you, and you will officially own the property.

It is vital to work with a real estate agent who is well-respected and experienced, whether you are buying or selling a house in a hotspot area such as Northern Virginia or another location. Invest the time necessary to find a real estate agent in whom you have complete faith, and make sure that each stage of the process is carried out with the utmost attention to detail if you want your property deal to go well.