Purchasing a home can be a great investment and a lifetime of memories especially if it is done correctly. Below are some steps to help you with this process.
1. Deciding to buy a home. What goes into one’s decision to purchase?
The best thing to do is to base your decision to buy on facts and not fears.
- If you are paying rent, you most likely can afford to buy a home. (Of course, your credit will pay an important role in this as well)
- There is really never a wrong time to buy the right home.
- A lack of a substantial down payment doesn’t prevent one from making your first home purchase.
- A less then perfect credit score doesn’t necessarily stop one from buying a home.
- Your dream home most likely won’t be your first home, but buying your first home is the first step to getting your dream home.
- Buying a home is made less complicated when using professional whose job it is to help you along the way. A license Realtor and lender are two of your best in helping your through this process.
2. Finding a Real Estate Broker. Why does one need one?
In the process of purchasing a home, there will be numerous separate individuals involved in the transaction. Such as insurance assessors, mortgage brokers and underwriters, inspectors, appraisers, escrow officers, buyer’s brokers, seller’s brokers, bankers, title researchers as well as a number of other individuals who will be involved to help move the home purchasing process along. Your Real Estate Broker has the responsibility to expertly coordinate all these professionals so you are able to purchase your home and to act as your advocate with your interests throughout the transaction. Below are some of the main roles a Buyer’s Restate Broker should perform:
- Educate you about the real estate market you are looking at.
- Analyze your wants and needs in purchasing a home.
- Guide you to homes that fit your criteria.
- Coordinates the work of other needed professionals.
- Negotiates on your behalf.
- Checks and double-checks paperwork and deadlines.
- Solves any problems that may arise.
3. Securing financing. What does this mean?
To purchase a home, one needs to know how much of a home they can afford. In order to do that one needs to find a lender. As your Realtor, I can recommend several lenders to you. Who you decide to use is up to you. You will want to speak to the lender and find out if they are able to finance the type of home you are looking for and for your financial situation. For example, not all mortgage lenders or banks finance manufactured homes or are able to do specialty loans such as VA or Native American Grants. You want a lender you feel is knowledgeable, confident and will work for you.
Each lender will have their own process they follow but below are the general steps one will go through when purchasing a home:
- One will make a loan application and get pre-qualified so one can start to look at homes in the right price range with your Realtor.
- Determine the type of loan that will work best for you and what you want to pay monthly.
- Work with your lender to complete additional paperwork to get fully approved for the type of loan and amount.
- Once you found the home you want and have worked with your Realtor to make an offer and it has been accepted, that purchase agreement will be sent to your lender to start further processing.
- An appraisal will be done to ensure your home is worth the amount you have offered.
- Title work will be ordered so you can receive a Title Commitment on the home which allows you to see the history of the property you are purchasing and to make certain there are no judgments or liens on the property as you want to be certain you are the only one on the title of your property.
- Documents are prepared so you can close on your home.
4. Finding your home. How do I know where to start?
While jumping in a car and going from house to house to look at them is exciting, one doesn’t want to be driving in all directions or for weeks and weeks. To make this process easier for you, one needs to assess one’s values, wants and needs for now and in the future. Below are some areas to look at:
- What do I want my home to be close to?
- How much space do I need and why?
- Which is more important: location or size?
- Do I want a fixer-upper? And if so, how much of a fixer-upper am I up to?
- How important is home value appreciation?
- Is the neighborhood a priority? Is it stable?
- Do I want a condo, manufactured or stick built home that is detached, single family home?
- What features and amenities do I want in my home? Are they more important than the location and size?
- Would I be interested in a new built home?
5. Making an offer. What does this all entail?
Now that you have found the home you would like it is time to put together an offer. How do you do that? Your Realtor will be guiding you through this step by step.
- You will go over what the duties of the Realtor are so you more fully understand that role.
- You will offer a price for the home. You want to be fair and ensure it reflects the true market value of the home. Your Realtor should have market research for you that will help guide you in a price to offer.
- You will want to put in the terms in which you would like to purchase. This includes when one wants to close, amount of earnest money, items in the house that one would like to have included in the purchase price (such as the refrigerator, blinds and other personal items that are not part of the house), what inspections will be done and who pays for them, home warranty and do you as the buyer need the seller to help with any of your closing costs.
6. Offer accepted, now what?
Now that you have an offer accepted you are what is called “Under contract” and both you as the buyer and the seller need to perform the actions in the purchase agreement by the dates stated. To best do this, your Realtor should set up a timeline for you with what is needed and by when and do is to do it. Some of the important ones are:
- Getting your earnest money to the title company.
- Setting up and getting the inspections done. In this step the Realtor really takes the reins and ensures you have decided on who you want to do the inspections you want done and then gets them ordered to be done before or by the deadline set out in the contract.
- Making certain appraisal is ordered.
- Making certain you have called for homeowner’s insurance.
- Completing any additional paperwork the lender may need so your loan will go through by the closing date.
- Ensure any repairs noted in the inspections that you requested and have been agreed upon by the seller are done.
7. What is this?
This is the final stage of the home buying process. The lender has confirmation of the home’s value and legal statue and your credit has continued to be credit-worthy. A survey has been done as well as an appraisal and title search. One last check of your credit and then you are ready to close.
