Step 1: Start Your Search Early
As soon as you can, start reviewing websites and
other sources that have real estate listings. Make a note of homes that
you would be interested in and see how long they stay on the market. Also,
note any changes in asking prices. This will give you a good sense of the
housing trends in specific areas.
Step 2: Determine How Much House You Can Afford
Lenders generally recommend that people look for
homes that cost no more than three to five times their annual household income
if the home buyers plan to make a 20% down payment and have a moderate amount
of other debt. However, you should make this determination based on your
own financial situation.
Step 3: Get Prequalified and Pre-approved for
Credit on a Mortgage
Before you start looking for a home, you will
need to know how much you can spend. The best way to do that is to get
prequalified for a mortgage. To get prequalified, you just need to provide some
financial information to your mortgage lender such as your income and the
amount of savings and investments you have. Your lender will review this
information and tell you how much they can lend to you. This will tell you
the price range of the homes you should be looking at. Later, you can get
pre-approved for credit which involves providing your financial documents
(W-2 statements, paycheck stubs, bank account statements, etc.) so your lender
can verify your financial status and credit.
Step 4: Find the Right Real Estate Agent
Real estate agents are important partners when
you’re buying or selling a home. Real estate agents can provide you with
helpful information on homes and neighborhoods that isn’t easily accessible to
the public. Their knowledge of the home buying process, negotiating skills, and
familiarity with the area you want to live in can be extremely valuable. And
best of all, it doesn’t cost you anything to use an agent – they’re compensated
from the commission paid by the seller of the house.
Step 5: Shop for your Home and Make an Offer
Start touring homes in your price range. It
might be helpful to take notes (using this helpful checklist) on all the homes
you visit. You will see a lot of houses! It can be hard to remember everything
about them so you might want to take pictures or video to help you
remember each home.
Make sure to check out the little details of
each house. For example:
• Test the plumbing by running the shower
to see how strong the water pressure is and how long it takes to get hot water
• Try the electrical system by turning
switches on and off
• Open and close the windows and doors to
see if they work properly
It’s also important to evaluate the
neighborhood and make a note of things such as:
• Are the other homes on the block
well-maintained?
• How much traffic does the street get?
• Is there enough street parking for your
family and visitors?
• Is it conveniently located near places
of interest to you: schools, shopping centers, restaurants, parks, and public
transportation?
Take as much time as you need to find the right
home. Then work with your real estate agent to negotiate a fair offer based on
the value of comparable homes in the same neighborhood. Once you and the seller
have reached an agreement on the price, the house will go into escrow, which is
the period of time it takes to complete all of the remaining steps in the home
buying process.
Step 6: Get a Home Inspection
Typically, purchase offers are contingent on a
home inspection of the property to check for signs of structural damage or
things that may need fixing. Your real estate agent usually will help you
arrange to have this inspection conducted within a few days of your offer being
accepted by the seller. This contingency protects you by giving you a chance to
renegotiate your offer or withdraw it without penalty if the inspection reveals
significant material damage.
Both you and the seller will receive a report
on the home inspector’s findings. You can then decide if you want to ask the
seller to fix anything on the property before closing the sale. Before the sale
closes, you will have a walk-through of the house, which gives you the chance
to confirm that any agreed-upon repairs have been made.
Step 7: Work with a Mortgage Banker to Select
your Loan
Lenders have a wide range of competitively
priced loan programs and a reputation for exceptional customer service. You
will have many questions when you are purchasing a home, and having one of our
experienced, responsive mortgage bankers assist you can make the process much
easier.
Every home buyer has their own priorities when
choosing a mortgage. Some are interested in keeping their monthly payments as
low as possible. Others are interested in making sure that their monthly
payments never increase. And still others pick a loan based on the knowledge they
will be moving again in just a few years.
Step 8: Have the Home Appraised
Lenders will arrange for an appraiser to
provide an independent estimate of the value of the house you are buying. The
appraiser is a member of a third-party company and is not directly associated
with the lender. The appraisal will let all the parties involved know that you
are paying a fair price for the home.
Step 9: Coordinate the Paperwork
As you can imagine, there is a lot of
paperwork involved in buying a house. 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 house you are buying.
Step 10: Close the Sale
At closing, you will sign all the paperwork
required to complete the purchase, including your loan documents. It typically
takes a couple of days for your loan to be funded after the paperwork is
returned to the lender. Once the check is delivered to the seller, you are
ready to move into your new home!
Hope these information helps! Keep in
contact. 321.460.3208
