Steps to Buying a Home
Buying a home is an exciting time in life! Our agents would love to assist you every step of the way. The first three steps you’ll need to take as you get started are finding the right agent, figuring out what your budget is, and then beginning your search! First-time home buyer? Read more about the roadmap to home ownership below.
STEP 1: DETERMINE HOW MUCH YOU CAN AFFORD
Before the house hunting process begins, it is important to know how much you can afford. Expenses to consider include the down payment, monthly expenses, property taxes, and any home insurance costs. These will all have to be considered before the home buying process begins as they are typically included in your new monthly payment. Since a person’s credit score determines their interest rate, knowing your score ahead of time can help you decide if now is a good time to buy or not. An individual’s debt-to-income ratio must also fall within acceptable limits of the home’s cost. Once you have determined these things, and if you feel that your budget has enough room to afford a new home, then it’s time to look for the right loan.
STEP 2: GET PRE-APPROVED
Different banks and companies will offer different loan origination fees and by shopping around you can oftentimes save yourself a lot of money. Get multiple quotes so you can make sure you get the best rate & terms. Be sure to also check your loan officer’s website for testimonials and information. A good loan officer will offer you many online resources and tools. Before you lock in your rate, be sure to check the daily rate with the rate your loan officer gives you to ensure you are getting the lowest rate possible. Interest rates will determine how much a mortgage will cost each month and come in fixed or adjustable terms. Mortgage lengths can range from 15 years to 30 years. The longer the repayment term, the lower the payments will be. However, the interest accrued will also be higher on a longer loan. Don’t forget to ask for a pre-approval letter so you can include this with any offers you make.
STEP 3: FIND A REALTOR®
Before you start your home search it is important to find a Buyer’s Agent that will be looking out for your best interests so you don’t fall into a money pit or end up paying too much for your new home. A good Buyer’s agent will help guide you through the home buying process and can also save you TONS of time and money on the road to your new home. Buyer’s agents are legally bound to help buyers, whereas listing agents—the real estate agent representing the home listing—have a fiduciary duty to the home seller. Your Buyer’s agent will also set up home tours, give you insight on any homes you like that you may not be aware of, have knowledge of upcoming listings not yet on the market, help you negotiate the best terms, protect your part in the deal and give you invaluable advice throughout the process.
STEP 4: START SEARCHING
Start your home search by using your agents website (like this one!) to search the MLS for homes. Agent’s have a direct line to the MLS so their websites often update with the newest properties faster than the ‘big name’ sites out there. It also has a My Listing Manager tool that keeps you both in the loop. You can start your search and begin saving your favorite properties to your account and even set up alerts to get new homes & price changes emailed to you. Your agent can then see the properties you have liked and can send potential new properties directly into your Listing Manager that they think you may be interested in. It’s a WIN-WIN!
STEP 5: MAKE AN OFFER & NEGOTIATE
There is an art to making an offer on a home. Your Buyer’s Agent will help you choose the right terms for your offer and will be watching for signs of problems in the home. Listen closely and be sure to ask questions. Be sure to ask for an inspection contingency so if there are major problems you can back out of the deal without losing your Earnest Money. A Home Warranty is also a valuable part of your contract and is a sign of good faith on the sellers part. You want to make sure all of your bases are covered. That’s where having a Buyer’s Agent is most valuable so your rights and interests are protected. With their experience on your side, they will be able to help you negotiate a lower price that sometimes includes concessions or closing costs. Their job is to protect YOU in the contract.
STEP 6: HOME INSPECTIONS & APPRAISAL
Once your offer has been accepted you will need a home appraisal. Banks require this so they can make sure the home is worth as much money as they are lending you. You may also need some inspections depending on your loan type. FHA & VA Loans have more requirements than Conventional loans. This is also the time to have a full home inspection even if it is not required. A home inspector will go through the home and specifically look for problems and provide you with a full report on everything they find. This will give you the opportunity to avoid major problems and back out of the sale or negotiate repairs without losing your earnest money.
STEP 7: ASK FOR REPAIRS OR DISCOUNTS
Once the inspections are done you will more than likely ask the seller to fix some of the issues you found. Keep in mind that they are only required to fix something if the loan terms require it. Be reasonable but firm in your requests. If your seller rejects your request then it is up to you to decide how to proceed.
STEP 8: FINAL WALK-THROUGH
The final walk-through is an important last step, even if you are positive you are going to go through with the sale. Walk through and check the agreed upon repairs, make sure everything is in working order and new issues have not popped up. This is your last opportunity to back out. If everything looks good then its time to go to closing!
STEP 9: CLOSING & ESCROW
Before the home is legally transferred to you, the closing process must occur. During this phase, you will sign all of the mortgage documents, pay closing costs, and sign various other legal documents. Your Buyer’s agent will be at the closing with you to help you through it all. Once all of the papers are signed and monies are transferred, the keys to your new home are yours! The only thing left to do is move into your humble abode. This may occur immediately after the closing or at the date set in the closing documents.
STEP 10: MOVE IN
Depending on how far you’re moving or how much stuff you have, you may require a moving company or a moving truck. Professional movers may seem pricey at first but when you look at the time and money to get similar results, you may re-consider. Call and set your moving date and start packing! Many places like U-HAUL sell moving boxes that are made to make your move easier. Label everything with what is inside it and what room it goes in. Recruit friends and family if needed.
Bonus Buyer Tips
SEE WHAT OUR CLIENTS ARE SAYING:
Easiest transaction ever!
“We have purchased and sold a lot of real estate in our time, but this was, without doubt, the easiest transaction ever! Your team’s professionalism and extreme expertise was absolutely the best we have ever seen. Without question you guys live up to your motto of ‘Consistently delivering 110% of client expectations’. We were amazed at your performance and truly grateful to have you represent us.”
Washed away all our concerns
It is important for me to share my thoughts with you. Whenever I have a moment to look around my new house, I remember how lucky I was to have you as my realtor, and I continue to marvel at your abilities. As you may remember, our family was somewhat overwhelmed initially because we had to do a long distance purchase from Michigan, but you washed away all our concerns by helping us find this wonderful house that suits our needs and to do the closing in less than two weeks.
There are so many winning characteristics in you as a superstar realtor: your careful listening ear that hears your customer’s preferences, your knowledge of construction and home repair, a network of people necessary for a new home purchase, and your enchanting personality. Even more importantly, you were very thoughtful in considering everything from your customer’s perspective. It was so thoughtful of you to mail us, after the closing, a list of experts we could contact for home improvement. It shows how much you care for your customers and what you do.
I sincerely appreciate you for all your help, and our family members send you their heartfelt thanks as well.”
“We want to thank you very much for helping us with the sale of our house on Ashley Way and the purchase of our new house on Colchester Drive, both in Hermitage. Phillip, we were very impressed by your customer service and your ability to get things done. Also, the way in which you were able to solve any problem that arose showed us that you truly cared about making sure we were satisfied with the results.
Your help in solving any problems that arose made it possible for us to prepare for the birth of our so, Preston, on the same day that both closings took place. We could not have done this without your pleasant personality, your knowledge of the real estate business, and your exemplary customer service.
You can be sure that we will call you again when we plan to sell and that when anyone asks if we know of a good real estate agent, you will be highly recommended without hesitation.”
So attentive to my needs
“I am so, so thankful you were my agent! You were extremely patient, kind and so attentive to my needs as a 1st time buyer. You showed genuine concern for my needs and helped me purchase this home at an incredible discount. Thank you so much!”
You were amazing!
“I would like to thank you for the great job you in did in helping me purchase my new home. You were amazing! You did what you had to do and when that wasn’t enough, you did more! I don’t know many people in any profession that would do that. Thanks a million!”
I cannot express how easy you made the whole process for me
“Thank you so very much for all you have done these past months in selling my condo and assisting me through the the construction / purchase of Chelsea’s and my new home. As I said at closing, I cannot express how easy you made the whole process for me. I barely did a single thing and certainly felt no stress throughout the entire process. Your presence at the final walk-thru on the new home was invaluable, as you caught things I never would have seen. Thanks again!!”