Step 1
Step 1
Do you already know where you want to buy? If you want a condo, townhome, or single-family home? Which features do you like and dislike? What’s available on the market now? If you answered no to any of these questions, now is the time to start researching. In addition to looking for homes that interest you, also take note of any changes in asking prices. This could give you valuable insight into housing trends in specific neighborhoods and help you when the time comes to make an offer.
Step 2
Notice I said to decide on your budget—not determine how much the mortgage company will give you. In many cases, a mortgage company will pre-approve you for more than you’re comfortable spending, which is why you need to determine the monthly payment you feel comfortable with before talking to a lender. This likely includes doing a full household budget and taking into consideration what changes other than a mortgage payment will occur once you move into your new home. If you’ve lived in an apartment or with roommates, you may overlook new expenses like garbage, water, or HOA fees that could easily blow your budget.
Step 3
Just because you think you can afford a certain payment every month doesn’t mean the mortgage company will agree. Just as they may approve you for too large of an amount, they may also approve you for a lesser amount or deny you a mortgage altogether. Lack of time at a job, insufficient credit, past bankruptcies, or other financial issues can cause major problems when trying to secure a mortgage. Before you get your heart set on a home, talk to a mortgage professional to find out what amount you can qualify for. This will also be an advantage when you make an offer on a home, as some sellers won’t entertain offers from those who aren’t already prequalified for a loan.
Step 4
Can you shop for, look at, and ultimately make an offer on a home without a real estate agent? Technically yes, but why would you when it costs you nothing for an agent like me to take much of the stress off your shoulders? Not only will I help identify properties you might be interested in, arrange showings, and ultimately handle the offer process, but I also have a knowledge of the market that you don’t possess. I may be able to steer you away from certain homes or neighborhoods, suggest hidden gems, or give you pointers that will help you find your dream home for the right price.
Step 5
This should be the most enjoyable step of the entire process (other than moving in!). I will arrange showings of homes you’re interested in that are within your price range. Take notes about what you like and don’t like, and make sure to pay attention to details. Turn light switches on and off, open and close doors, and run the faucets in various rooms. Don’t limit your inspection to the home itself. Make sure to take time to explore the neighborhood and keep an eye on traffic at certain times of the day, the parking situation, and how close it is to necessities like schools and grocery stores.
Step 6
Once you have selected the perfect home, work with your agent to craft a fair offer based on the value of comparable homes on the market. Depending on what the home is listed at and whether the current environment is a buyer’s or seller’s market, your offer may be below, at, or even above the asking price. I will be able to help you negotiate if you receive a counteroffer and reach an agreement. At this point, the house will go into escrow.
Step 7
In most cases, your offer will be contingent on having the home inspected to ensure there is no major structural damage or large repairs needed. I can help you arrange this, and you can schedule it within days of making an offer. If there are no major issues, the process goes to step eight. If there is, you can renegotiate your offer based on what needs to be fixed, or you can withdraw it.
Step 8
Now is the time to go back to the mortgage lender who pre-approved or pre-qualified you and choose your mortgage. You will be presented with various options based on your unique financial situation, including fixed-rate, variable-rate, 15-year, 30-year, or special programs such as VA loans or FHA loans. Work with your mortgage lender to select the option you feel the most comfortable with.
Step 9
Your lender will have your new home appraised so they have their independent value of it. The appraisal is to ensure that all parties involved are paying a fair price for the house.
Step 10
No one looks forward to all the paperwork involved in buying a home, but it’s a necessary part of the process. Fortunately, everything will be arranged by your lender and title company and, when you’re finished, you’ll know you are the legal owner of your new home.
Q: How do I start the process of buying a home?
A: Start by evaluating your budget, obtaining pre-approval for a mortgage, and enlisting the help of a skilled real estate agent who will work in your best interest and fight for the best deal on your behalf.
Q: What is the difference between pre-qualification and pre-approval?
A: Pre-qualification is an initial estimate of the amount you may be able to borrow, while pre-approval involves a comprehensive review of your financial history by a lender. I can connect you with several lenders who can help you find the best interest rate. The process of getting pre-approved for a mortgage is completely free.
Q: What are closing costs, and who typically pays for them?
A: Closing costs are the fees that are associated with finalizing the home purchase. These fees can include appraisal fees, title insurance, and more. Typically, both buyers and sellers contribute to these costs. Every transaction is different, and we can work together to go over all the details so that you are not surprised by any fees.
Q: What credit score is needed to buy a home?
A: While specific requirements vary by lender and loan type, a higher credit score (generally above 620) increases your chances of securing a mortgage with favorable terms. However, there are a lot of other resources we can use to solidify a mortgage or a lender for you. There are a lot of options that I can use to get you into a home.
Q: How much of a down payment do I need?
A: Down payments typically range from 3% to 20% of the home's purchase price. The amount required depends on various factors, including loan type and lender requirements.
Q: Can I buy a home with bad credit?
A: It may be difficult to find a mortgage with a low credit score, but there are programs available. Consider improving your credit score before applying for a mortgage. I can help you create a plan.
Q: What's the difference between a condo, townhouse, and single-family home?
A: Condos are individual units within a larger complex. These may have additional fees associated with them, such as a Homeowners Association (HOA) fee. Knowing the rules and regulations of these condominiums is a crucial part of deciding what is best for you. Townhouses are multi-level homes that share walls with neighbors, and single-family homes are standalone properties. All three of these properties can have additional fees associated with them that can affect your monthly payments. Being advised by me on all of these matters will help you make the best decision for you.
Q: What is a home inspection, and is it necessary?
A: A home inspection is a thorough evaluation of a property's condition. It is highly recommended to conduct a home inspection before purchasing a home to identify any potential issues. As a professional, I always advise my clients to get a home inspection done as it can alleviate any concerns they may have.
Q: What should I consider when choosing a neighborhood?
A: Factors such as location, schools, amenities, safety, and property values can significantly impact your decision. Visit the area at different times to get a feel for it.
Q: What is earnest money?
A: Earnest money is a deposit made by the buyer to demonstrate their commitment to purchasing the home. It's held in escrow until the sale is finalized.
Q: What is a contingency, and should I include them in my offer?
A: Contingencies are conditions that must be met for the sale to proceed. Common ones include home inspection, appraisal, and financing contingencies, offering protection for the buyer.
Q: Do I need a real estate attorney when buying a home?
A: While not always required, having a real estate attorney can be beneficial, especially for complex transactions, ensuring legal aspects are handled correctly. I have preferred attorneys who work specifically on real estate transactions that can assist you at a discounted price.
Q: What happens on closing day?
A: On closing day, both the buyer and seller sign the necessary documents, funds are transferred, and ownership of the property is officially transferred from the seller to the buyer.
Q: How long does the closing process take?
A: The closing process typically takes around 30-45 days from the acceptance of the offer to the actual closing date, but this timeline can vary based on various factors.
Get assistance in determining current property value, crafting a competitive offer, writing and negotiating a contract, and much more. Contact me today.
