BUYING A HOME?
Deciding whether to buy a home is a huge step. Especially if you're a first-time homebuyer. Here are 15 steps that you can take to buy a home:
1. Research Early - There are many factors to buying a home and some of them take an abundance of time. If you want the best price for your money you should prepare early and learn the housing trends in your area.
2. Decide if You're Ready to Buy a Home - Are you in a place, financially, where you can afford a home? One of the first things to do in preparing to purchase a house is to check your credit score. There are free credit score websites such as credit karma, nerd wallet, or credit sesame or you can check your bank for a credit score program. If your credit needs salvaging you can get free credit counseling, this article from credit karma explains how.
3. Prepare a Housing Budget - Your next step will be to create a housing budget and begin saving for not only a down payment but also closing costs. Take the time to calculate how much house you can afford. Is it enough to meet your needs? Lenders generally suggest looking for homes that cost no more than three to five times the annual household income, and that is if the home buyers plan to make a 20% down payment.
4. Get Mortgage Preapproval or Prequalification – Along with preparing a housing budget getting preapproved will let you know how much you can spend on a new home. It also lets sellers know that you are serious and prepared to purchase. To get preapproved you give some financial information to a mortgage banker and after reviewing your information they will tell you how much they can lend you. We recommend Fast Track Mortgage.
5. Make a List of Needs and Wants - Make a list of three to four things that you need in a house, and then list all the things you want. These will help you to narrow down your search for a new home.
6. Find the Right Real Estate Agent for You - This is where we come in! Havoya has experience in many different markets and we're ready to help you find the perfect home. While it may seem like having a Real Estate Agent is expensive, buyers don’t pay agent commissions, so there is no cost for you to have an agent. Just the opposite in fact, agents can help you find the perfect home and keep you informed of options like first time homebuyers’ programs that will help you save money. They also have the expertise necessary to help you beat the housing trends in your area.
7. Decide on a Location - Urban or rural? Close to work? Figure out the area you want to live in and make sure to think about factors such as school ratings, parks, commute, population density, what stores are around, etc. As part of this decision you can also figure out whether you want to buy new construction or resale, single family or condo, duplex or townhouse. There are many options to choose from.
8. Go House Hunting – Go tour houses with your Agent. Looking at homes in person will help you get a better feel for the atmosphere of the home, neighborhood, and area. If you don’t plan on staying in the home long-term, make sure that the surrounding homes are also well maintained and that they won’t negatively affect the market value of your home. Visit lots of homes, so that you are sure to pick the best one for you and your family.
9. Make an Offer - At this point the expertise of your Real Estate Agent will be invaluable. Your Agent will be able to help you negotiate for a price that is suited to the property that also works for you. Your Real Estate Agent will also help you navigate the legal paperwork that comes with making an offer.
10. Schedule a Home Inspection - Your Real Estate Agent will help you arrange for the inspection to happen within a few days of your offer being accepted. Do you remember the Tom Hanks movie Money Pit? The home inspection will prevent that from happening to you. A home inspection means that a licensed professional comes out and determines the condition of many aspects of the house. You then receive a detailed report and have the opportunity to make your complaints to the sellers.
11. Negotiate Repairs or Credits - Following the home inspection imperfections are almost always discovered within the house. With the help of your Real Estate Agent you may now negotiate for repairs or receive credits for the cost of repairs from the sellers. Negotiating is one other aspect in which your Agent will save you money.
12. Select Your Loan - There are many competitively priced loan programs and you have the option of choosing one that best suits you and your finances. Work with your mortgage banker to figure out how best to finance your home. During this time you will also schedule an appraisal for the property. Lenders will arrange for an appraiser to provide an independent estimate of the value of the house you are buying, which your loan is dependent upon. If the home does not appraise for the sum of your loan you may have to renegotiate cost with your sellers or choose another property.
13. Paperwork - There is a plethora of paperwork involved in purchasing a home. Your lender will arrange for a title company to handle all of the paperwork and make sure that the seller is the rightful owner of the home. Your Real Estate Agent will assist you in completing paperwork and ensure that all necessary documents are accounted for.
14. Final Walk-through - Before closing on your sale you will take a final walk-through of the property and make sure that nothing has been changed throughout the transaction and that inclusions are still present on the property. This is the final inspection of your home prior to the signing of all the documents which make a sale official.
15. Closing - This includes signing all of the paperwork required to finish your purchase, including your loan documents, and having them notarized. It will generally take a few days after closing for your loan to be funded. As soon as the check is delivered you can move in. The keys are yours.