So you’re ready to buy a home? Well, before you get that new house key in your hands lets take a look at how we get there. Whether you’re a first time home buyer or someone who has done it several times it’s often a mix of emotions from frustration to excitement but if you review the 10 things you need to know before buying the process should go much smoother, faster and be more rewarding.
Step 1: Are You Ready?
Have a plan; know what areas you want to be in and how many beds and baths you need to fit your lifestyle. I would suggest considering your drive to work, schools, and area amenities such as shopping and so on. These items vary for every buyer so make a check list of what’s most important to you and at a later time you can share that with your Realtor.
Step 2: Get Pre-Approved:
Yes, get approved now. Many buyers wait for this step until after they find a house they love only to discover they can’t afford it or the house has other offers on it and you’re not prepared to send an offer because you don’t have a pre-approval letter (which must accompany every offer) and you lose the house to another home buyer. Getting pre-approved is something that can take just minutes either on-line, in person or over the phone with a mortgage lender. Another reason to get pre-approved is the lender can review today’s interest rates, closing costs you will be expected to pay and you may realize you can afford more or less than you thought so get it checked out.
Step 3: Contact A Realtor:
I know what you’re thinking, darn salespeople, ick! Here are some tips:
- Use a Realtor who is full time — part time Realtors just don’t have the time you need
- Remember the “ick” part above — talk to a couple Realtors and make sure you feel in your gut they are NOT the slick wily salesperson we all have grown to dislike. You need someone you feel good with and know will get he job done. There are thousands of Realtors out there so if your gut says no, move on.
Yes, you can look on your own BUT keep in mind that takes a lot of time especially if you work full time. Also the co-op web sites out there do not upload homes as fast as the real MLS Realtors use so your Realtor will see the new listings before you. Lastly, many homes you see while driving around may already be sold even though they have a for sale sign so your Realtor can save you a lot of time. Once you contact a Realtor make sure to review your list, remember step one? Give those details to your Realtor and review your specific needs.
Step 4: Start The House Hunting:
This is the most exciting part of the home buying process for most people, but especially for first time home buyers. This is when you get to go out and shop for homes and find the one that will be yours. By this step you are well prepared. You’ve established your criteria, established financing with your pre-approval letter and found a Realtor who will help you through the process.
Step 5: Write The Offer:
Most likely you have looked at a few properties by now and have an idea if the asking price is high, fair or low compared to other homes. However, I would recommend having your Realtor pull up some sold comparables in the same area to compare before bidding. Unless you’re an investor buying to flip or the home is something you are doing major work on I suggest you make the offer subject to a home inspection so you know what you’re getting into.
Step 6: Addendum’s To The Purchase Agreement:
If this is a foreclosure home or short sale make sure your Realtor gets you all the required documents the bank needs so when your offer does go in it’s complete and you have the best chance of winning. Consider any other specifics you may need and get them on the proper addendum’s such as:
- Do you need to sell first?
- Close date?
- Zoning or approval contingencies?
Step 7: Offer Accepted Now What?
Great, you got it! Now let’s get the inspectors in right away. I suggest you go to the inspections as well so you can not only see any issues first hand but it will allow you to learn more about how the house functions. If issues arise you want the seller to repair then your Realtor will have to go back and negotiate on your behalf. Once the inspections are settled and removed your loan officer will have the bank appraise the property.
Step 8: Choose A Title Company / Closer:
Just like buying a car or boat, you will need to transfer the title and pay the sellers which will involve a closer and title company. Ask your Realtor who they would suggest, a good Realtor will set all this up for you.
Step 9: Closing:
You will attend closing most likely at the Realtors office or the title company. Make sure to have your drivers license with you, cashiers check if applicable (no cash or personal checks typically taken) and block about 90 minutes to get it all done. The closer will most likely ask you if you want title insurance. Title insurance will protect you if any future claims or issues come up on the property — it’s a good thing to get.
Step 10: Homestead & Enjoy:
If this is going to be your primary residence then you need to homestead your property which will also save you on taxes. To homestead simply go down to the property appraiser’s office (typically in the government/courthouse center) in your county and fill out the homestead papers which state this is your primary home and not a rental property. Now, finally…….Enjoy!