Purchasing a home is one of the biggest choices most will make in their lifetime. While it involves a long-term financial and emotional commitment, home buying can be a very rewarding and exciting process.
When purchasing a home, there are many things to think about:
- What can I afford per month?
- What should I look for in a home?
- Is a realtor right for me?
- What happens after I purchase the home?
- How much do I need at closing?
- How do I obtain a mortgage?
Before You Search
Prior to looking at homes, we suggest you research and complete the following:
- Unless able to purchase with cash, most buyers must apply for a mortgage. By getting in touch with loan specialist before you start searching, you can determine how much you qualify for. A borrower is typically pre-qualified for a mortgage that amounts to roughly one-quarter of their income per month. Plus, you have a comfortable monthly payment in mind, a mortgage specialist can determine a price range. Getting pre-qualified also increases the likelihood of your offer being accepted, as a seller more often accepts an offer from a purchaser with funding secured.
- Retrieve a copy of your credit report so you’re familiar with any derogatory marks or mistakes on your record. At the same time, you should start paying down credit card balances to minimize your consumer debt.
- By going through the pre-qualification process, your mortgage specialist can give you a better idea of how much money you’ll need for this transaction. A certified check is required for closing costs, earnest money and the down payment.
Create a List of Amenities
You probably have a good idea of what’s most important to you in a house, but put those thoughts to paper before you start. This list will help you cross off houses that aren’t a fit.
Here are some of the most common amenities for homeowners:
- Cost of Home
- Closeness to restaurants, shopping, hospitals, and more.
- Amount of Bedrooms and Bathroom
- Pool in Backyard
- Two-plus Car Garage
- Size of Lot
Choose An Agent:
After you’ve settled on a price range and must-have features, the next step is deciding whether or not to use the services of a realtor.
Consult with family and friends for agents who’ve helped them in the past. Conduct interviews with a number of agents to find someone with whom you’re comfortable. Once agreed upon, your realtor will scrub listings of properties to see what matches your listing. They will see this process all the way through to the end by showing you homes and guiding you through the negotiations and the selling process. They can also schedule appraisals, lender referrals, home inspection and closings along the way.
The Search Process
Once you begin searching for homes that interest you, be sure to chew up the scenery and take as much time as possible in deciding. Each home is different, and the amenities checklist from before will come in handy when you tour homes.
What To Think About At Showings:
- Potential Utility Costs
- Regular Upkeep and Maintenance
- Decorations and Updates
- HOA Fees
- Neighborhood Traffic
Emotions and impulse should take a backseat to your checklist, so be sure to take notes for when the time is right to clear your head and decide on the right home.
Making an Offer
Once found the home of your dreams, the next step is to make an offer. Your realtor will help you come up with the perfect number by comparing prices for recently sold homes in the area with similar features.
In addition to the selling price, you’ll have to determine these other factors in the purchase offer:
- How much earnest money to offer.
- A list of concessions the seller should make, such as home updates or closing costs.
- Any contingencies on financing and the home inspection.
- A defined list of what comes with the home, including window treatments, appliances, etc.
- Your desired closing date.
If your first offer isn’t accepted, don’t be surprised. Negotiating a home is akin to a tennis match, and your realtor will help you in all negotiations until an agreement is reached.
It’s critical for a certified inspector to thoroughly examine your new home. They are trained in identifying potential problem spots such as structural, plumbing and electrical issues that an untrained eye such as yourself might not see. While not always required, booking an inspector is in every buyer’s best interest. Your realtor will likely have a list of good inspectors to take care of your home.
The scariest part of the process isn’t anything listed above — it’s the waiting game you play after the offer has been accepted and before your loan is approved.
When applying, be sure to include the following:
- Two years worth of W-2s and Tax Returns.
- Pay stubs from any income in the past thirty days.
- Any investments or debts to creditors.
- Banking statements from the past two months.
The Final Walkthrough:
Near the time of closing, you’ll be given access to your new home for a final walkthrough to make sure everything meets your approval.
What to look for:
- All repairs from the purchase agreement have been made and the house is in ‘as-was’ condition. Specifically, this means that everyone has moved out, the house is clean, and there is no junk or trash left behind.
When the offer has been accepted, it’s time for closing. At an acceptable date and time, you will meet with a closing agent. Be sure to bring a certified check for the predetermined necessary amount and necessary identification to the table.
At closing, the sales contract is outlined, and when you find everything acceptable, your signature seals the deal and makes you the owner of a new home!