Congratulations!!! You have decided to become a home owner. Now what?
We know buying a home can seem like a complicated and daunting task. Especially when it is likely to be the most expensive purchase you ever make.
But, don’t worry as we are here to HELP! Look below for an easy to use, step by step guideline:
Choose wisely. Your REALTOR should be someone you trust and one who is eager to help you get to your next phase in life.
Work with someone who has YOUR interests in mind and who is well-connected to other professionals who will be part of your home buying process.
This includes lenders, attorneys, home inspectors and title companies.
You will also want a REALTOR who is responsive, diligent & organized as there will be many deadlines to meet.
You do not pay the REALTOR anything. All commissions are paid by the seller.
If you are paying 100% cash, what you can afford is clear. However, if you are obtaining a mortgage, you will want to speak with a lender sooner rather than later.
It is important to understand all the costs involved and make sure there are no surprises in your credit.
Here is what we recommend!
Interview mortgage brokers (yes, we recommend meeting with more than one). They want your business and you may be able to get the best of what each one may be offering.
Select a loan type. Your lender will be able to provide the best guidance as to which loan type is most suitable as there are many! They will also review how various down payment amounts can best support you in getting the best terms.
What is cash-to-close? In addition to your down payment, there will be cash needed for closing costs and pre-payments (insurance, taxes, etc.). It is critical you understand the amount needed so you can budget accordingly.
Get a written pre-approval letter. This is not the same as an actual mortgage but it does show the seller you are as serious about buying their home as they are about selling it. This is a critical step which should not be overlooked, especially if homes are moving quickly in your desired market. Most sellers will not seriously entertain an offer without this.
Do what your lender tells you. Once pre-approved, it is critical that your follow your lenders instructions. This could be everything from keeping spending to a minimum to suggestions not to pay down your debt. Do not take this last step lightly.
At this point in your home search, you have probably been looking extensively on line and even driving through some neighborhoods you favor, and we highly recommend it.
And now that you are ready, it is time to get specific! Make sure you are communicating effectively with your REALTOR.
Your REALTOR should know by now what you want in your home and he or she should have also shared with you what is possible in your desired price point.
Be clear on your must-haves, would-be-nice-to-haves, and we can do it later.
Contact your REALTOR immediately with the address of the home you saw.
There are many i’s to dot and t’s to cross legally speaking, and you will want guidance.
Typically, a home owner who is attempting to sell his or her home on their own, has done so before.
As a first-time home buyer, you do not want to be guided by someone who is looking out for their own interests.
Now that you have found the home you want, it is time to take the next step – MAKE AN OFFER.
We want to make sure the seller sees our offer as the best offer they have. As your REALTOR, we will do everything possible to negotiate the best price and contract terms for you.
It is important to remember that the seller approaches the transaction differently than you, the buyer. The best contract however will always be the one in which both parties feel like it is a win for all.
Proposed closing date (date you would like to assume ownership)
Legal names of those on the deed
Escrow deposit amount and if you will present a 2nd deposit
Seller’s disclosure (and any other applicable disclosures)
Pre-approval letter from lender or Proof of Funds from bank
Any special conditions
It just got real. Your offer has been accepted and the deadlines are critical. Here’s what happens next:
Don’t forget what your lender told you!!!
ALL involved parties will be notified.
Hire an inspector. We will make a recommendation. The inspection company will guide you as to what should be inspected for your peace of mind as well as insurance purposes. This will be an out-of-pocket expense of around $400-$500 but could vary based upon home size and inspection options made.
Make the escrow deposit. The title company will reach out and make sure you know how to either wire or deposit the money for the initial deposit.
Did the inspection uncover anything? If the inspection uncovered any defective items, we will talk about the best approach to addressing this common item with resale properties.
Get an appraisal. An appraiser will come into the home (if you are obtaining a mortgage) to inspect the home’s value. They want to make sure the home is a sound investment as the lender considers this to be collateral for your loan.
Keep doing what your lender tells you!
If a second escrow deposit is required, make sure it gets made.
Final walk through. On the day of closing, a walk through will be scheduled to make sure the home is in the expected condition.
CLOSING!!! We will meet at the title company or attorney’s office. Any balance of your loan deposit and closing costs will need to be wired. Once it arrives, you will begin signing all documents to finalize your home purchase.
YOU ARE NOW A HOME OWNER!