Your Path to Home Ownership
If you’re like most people, buying a home represents your single biggest investment – and debt. As such, the home buying process can be one of the most exciting, but sometimes also stressful, experiences you ever go through.
Whether you’re becoming a homeowner for the first time or you’re a repeat buyer, buying a house is a financial and emotional decision that requires the experience and support of a team of reliable professionals. It’s crucial for you to have all the available resources necessary to make a well-informed decision, together with the time required to make complete use of them. Generally, finding and purchasing a home includes the following steps:
1. Review Your Financial Health
Lenders generally recommend that people look for homes that cost no more than three to five times their annual household income if the home buyers plan to make a 20% down payment and have a moderate amount of other debt. Set aside three to six months of 'emergency' living expenses, then look at how much is left over in your savings and investment accounts that could go toward a down payment. If this is your first home, there are likely programs that can help. There may also be programs depending on your profession. Finding these programs is why Step 2 is so important.
2. Find the Right Real Estate Agent
Real estate agents are important partners when you’re buying or selling a home. Real estate agents can provide you with helpful information on homes and neighborhoods that isn’t easily accessible to the public. Their knowledge of the home buying process, negotiating skills, and familiarity with the area you want to live in can be extremely valuable. And best of all, it doesn’t cost you anything to use an agent – they’re compensated from the commission paid by the seller of the house.
In choosing a REALTOR® to guide you through the property search, financing, negotiation and transaction processes, you should consider their local market knowledge, experience and track record, as well as the team of professionals they surround themselves with.
3. Get Pre-Approved For A Loan
Generally, it is recommended that you get pre-qualified for a loan before you start viewing homes with the serious intention of buying. The pre-approval process involves meeting with a lender and authorizing them to examine your current financial situation and credit history. The benefits of pre-qualification include being able to plan better knowing what you can afford, you’ll be taken more seriously when you make an offer on a home, Lenders can tell you whether you qualify for any special programs that will enable you to afford a better home (particularly if you’re a first-time buyer).
Real estate financing is available from many sources, and an Debbie will be able to suggest lenders with a history of offering excellent mortgage products and services.
4. View Homes And Select THE ONE
Simply put, key to the home search process is knowing what you’re looking for. Among other things, that means distinguishing between “must-haves” and “like-to-haves”. Debbie is here to help you to target your search and define your home preference priorities. You can view many homes and their details online, take video tours and access neighborhood info. I have a great tool that will help you keep your online search organized. However, it’s also important to view homes in person. While their property details may seem similar online, homes can actually be very different in terms of layout, design, workmanship and other aspects.
5. Make An Offer And Negotiate With The Seller
Once you have found the perfect home, it is time to make an offer on the property. This is an area in which a real estate agent like Debbie is invaluable. She will base the offer price off of comparable homes that have sold recently in the area. She will draft a contract that is agreeable to the home buyer. The contract will include the price of the offer, as well as terms that the seller and the buyer will need to meet in order to achieve a successful transaction. Finally, Debbie will ensure that the contract meets all of the necessary legal requirements.
Once you’ve written the offer, your REALTOR® will present it to the seller. At that point, the process – given that a home’s eventual sale price is subject to supply and demand – will depend on the kind of market you’re in. Generally though, the seller can accept your offer, reject it, or counter it to initiate the negotiation process.
6. Secure Your Financing
Once your offer is accepted, it’s time to go back to your chosen lender to finalize your mortgage details so you can close the deal. This means finalizing your down payment, interest rate, regular payment schedule and any other financial conditions associated with the closing. If you’ve already been qualified with a lender for a certain loan and home purchase, this phase of buying your new home should be a relatively straightforward matter that centers around finalizing the loan details and signing the mortgage papers.
Particularly in these times, when so many buyers are suffering the consequences of having not fully understood their financing decisions, it’s crucial for you to work with people you trust. In this regard, a good REALTOR® like Debbie can be a true friend for life.
7. Due Dilligence
Arrange for a home inspector to look over the property. The real estate agent can help locate a reputable inspector for the task. A qualified inspector will check the foundation of the home, plumbing, electrical systems, the roof, walls, and visible insulation. An inspector will also look for signs of mold, asbestos, and pests. A home inspection is generally one of the steps to buy a house that is being resold.
The buyer will need to purchase home owners insurance for the property. This will protect it in the event of fire, theft, or other potential liabilities. Title insurance is another type of insurance that homebuyers will want to consider. This will protect the buyer against liens. This should be equal to the home's full value.
GET THE TITLE REPORT
This historical review of all legal documents relating to ownership of the property ensures that there are no claims against the title of the property. Ask your escrow representative to go through it with you so that there are no surprises when you want to sell, later It is also necessary to purchase Title Insurance in case the records contain errors or there are mistakes in the review process.
8. Become a Homeowner
Prior to the closing date, you should verify with Debbie, your lender, and your escrow company that all of the necessary documents have been signed and terms met. If they have not, this should be taken care of immediately to ensure that there are no last-minute problems. You will also want to verify what forms of payment are acceptable. On the closing date, closing costs and fees will be paid.
One of the best days for Debbie is the day she gives you the keys to your new home!