Steps For Home Buying Success
Buying a home can be an exciting, but overwhelming process. You have a lot at stake and many decisions to make before signing on the dotted line. Here are seven steps to guide you through the home buying process with a smile on your face.
Step 1: Establish Your Needs and Wants
Make sure that you have a thorough understanding of whether you’re ready to buy a home. Create a list that outlines each of your reasons for homeownership; you may need it later if you get cold feet. Next, create a list of the specific features you would like to see in your next home: the things you must have, and the things that would be nice to have. Prioritize your list.
Have everyone involved in the home purchase decision create their own list, then compare. Determine where you can compromise and what features you can and can’t live without, so that everyone is on the same page.
Step 2: Determine how much you can afford
Set a budget for yourself and determine how much money you will put down and how much of a monthly payment you can comfortably afford. Most lenders suggest that your payments (including taxes and insurance) be no more than 28 percent of your total monthly income. Use an affordability calculator to determine a reasonable price range for your home.
Step 3: Get pre-qualified or pre-approved by a lender
Meet with a lender before you start your search for a home. This process will increase your creditability as a serious buyer and will help you avoid wasting time looking at properties that are out of your price range. Pre-qualifying is the first step in the mortgage process and usually requires no fee. You are just given an estimation of the loan amount for which you qualify.
Getting pre-approved for a loan is a formal process, in which all of your documentation is completed and submitted to an underwriter. Pre-approval is actual loan commitment from a lender – your guarantee of approval.
Step 4: Work with a Qualified REALTOR
Your real estate agent should be your most valuable asset in the home buying process. Their expertise and know-how can help you find a good lender, locate the right home, get you through the negotiating process, and manage the steps from contract to closing. An agent’s role is to help you sort through your needs and options, and help you to make decisions that are good for you. As a buyer, you are not charged for Realtor fees, so it doesn’t make sense to work without an agent.
Step 5: Find the home that meets your needs
Here comes the fun part – shopping for your next home. Use the lists you created in step 1 to remind youself of your true needs and motivations. As you tour each home with your agent, keep track of what you like and dislike. If you find a home you like, do a little more research on the neighborhood and surroundings to make sure you’d be happy living there.
Step 6: Make an Offer to Buy a Home
Once you find a home that you love and that meets your needs, then don’t hestitate to make an offer! If you wait until next month, that house might be gone. Trust your agent on how much is a reasonable offer. Your agent should explain the entire sales contract, your obligations in the agreement, and your options, including the home inspection or inspections contingency. Prepare for negotiations by outlining the concessions you’re willing to make and those that you won’t even consider.
Step 7: Complete the home purchase
The home purchase is a step-by-step process that can take as many as 90 days or more to complete. Your partnership with your agent is critical at this point in the transaction and good communication is essential to make sure everything progresses as smoothly as possible. Always complete all your tasks a in a timely manner. Most importantly, keep focused on the goal of moving and settling in to your new home, and you will survive the home buying process with a smile on your face!
Fill out the contact form below when you are ready to start the home buying process.