Buying a new home can be a daunting and sometimes stressful process, unless of course you've got the right real estate professional guiding you through each step! If you've never purchased a
A Beginners Guide To Buying A Home
Buying a new home can be a daunting and sometimes stressful process, unless of course you've got the right real estate professional guiding you through each step! If you've never purchased a home of your own, the first step is knowing what to expect. Although every real estate transaction is a little different, here is a basic rundown of what to expect when purchasing a home.
Knowing your budget
The first step to buying a home is to meet with a lender and get pre-qualified, so that you know your home buying budget. Its a pretty simple process, and lots of times a lender can pre-qualify you right over the phone or even online. Ask friends, family or even your Real Estate agent for lender referrals, and don't be afraid to shop around and interview a few before choosing a lender!
Finding a professional you can depend on
If you haven't at this point, now is the time to choose your real estate agent. Having a buyer's agent will cost you nothing, as your agent's commission is paid by the seller of the home. Choosing a qualified real estate agent is important, and you'll want to find someone who you trust to work around the clock when needed, considering sometimes great homes don't stay available very long. With your pre-qualification amount set, you agent will be able to help you narrow down your search and help you find homes that meet your criteria as soon as they hit the market. Your agent and lender will also need to communicate at this time, since different loan types have different requirements for homes. (For example, FHA loans require the home to be move-in ready, so buying a home that is gutted with the intention of renovating it would not qualify.) View the different types of home loans here.
Happy house hunting
Once you find a home or homes that interest you, its time to go for a tour! Your Real Estate agent will set all of the listing appointments, and together, you'll go see the homes that interest you. Sometimes, you have to kiss a LOT of frogs to find your prince. Don't get overwhelmed if the first few homes aren't exactly what you want. Maybe this is a good time to reevaluate your search criteria or expand the area you are looking in! A good agent will be patient and happy to show you as many properties as it takes to find that perfect home.
Submitting an offer
Finally, you've found the perfect home! Before making an offer, have your REALTOR® run comps so that together, you can come up with an offer price. At this time, you'll need to reach out to your insurance agent for quotes on home and flood insurance, so that you can know what to costs to expect. Your lender will need to have your pre-qualification letter written up and sent to your REALTOR®, so he or she can submit it with your offer. Also at this time, begin thinking of what title company you'd like to handle your closing. Now your agent will submit your offer.
Often times you may counter back and forth, until a price is set. Once you and the selling party sign the contract, you are officially under contract and one step closer to home ownership. You will need to bring over your deposit check ASAP -- your contract will tell you where to bring it.Gathering up necessary documents for your lender to expedite your loan underwriting process. These usually include documents such as current paystubs, tax returns, bank statements, etc.
Lining up your home inspections is the next step. Just like finding a lender or real estate professional, you may want to ask for referrals for some inspection companies. Typical inspections include Home, Termite and Plumbing. Once inspections are complete, a comprehensive inspection response will be completed and you will have the option to request any deficiencies reported be repaired. The seller can also give allowances at this point for repairs. For example, reduction in price could be renegotiated. The seller is not required to make any repairs, so if an agreement cannot be reached, you are free to walk away from the contract.
The next step is obtaining a home appraisal. If the home appraises for over or at the negotiated price, that's great news! If for some reason the home appraises under the set price, re-negotiations may be in order again. If a seller won't reduce the price due to a low appraisal, a buyer can either cancel the contract and receive his/her deposit back, or come up with the extra funds to cover what portion will not be covered by home loan.
Final Walk Through
Once you've made it this far, the last step before getting to the closing table is doing a final walk through to ensure that the property is in just as good or better condition than it was when put under contract. This is also the time to ensure that all agreements made on the inspection response have been fulfilled.
The lender will require proof that you have sufficient funds for the down payment and closings costs prior to your closing, so be sure those funds are readily available, and be prepared to wire or present a cashier’s check on the day before closing. On the day of your closing, once you've reviewed and signed all closing documents, the house keys are yours and you will have successfully bought your new home! For a detailed explanations of the closing process, click here.
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