Buying a home is one of the biggest decisions most people will make in their life. It involves a long-term commitment financially and emotionally, but it can also be a very exciting and rewarding experience. The following steps are the usual practice to expect:
Get Pre-Qualified for Your Home Mortgage:
Unless you are able to pay cash for your home, most buyers will need to go through the process of applying for a mortgage. By contacting a mortgage loan specialist before you begin your search, you are able to determine the amount of loan for which you qualify. In addition, if you know the amount of the monthly payment you would be comfortable paying, a mortgage specialist can calculate the price range for your home search. Getting pre-qualified for buying a home also increases your chances of your offer being accepted. A seller is more likely to accept an offer from a buyer who already has funding versus one who still needs to get a loan.
Make an Amenities List:
Decide what features are most important to you in a home. By establishing your criteria, you will save time shopping for homes that do not meet your needs. Also, consider what locations you are interested in. When making an amenities list, determine which criteria you absolutely cannot live without and which ones you are willing to budge on. Such as:
•Neighborhood or subdivision
•Proximity to work
•Proximity to shopping, restaurants, hospitals, etc.
•Number of Bedrooms
•Number of Bathrooms
Choose An Agent:
Once you have decided on the price range and the features you are interested in, your next step will be to locate a real estate agent. It’s wise to enter into a Buyer’s Agency Agreement with your Realtor. This ensures that the agent will represent you, as the buyer, in the selling process, and not represent the interests of the sellers.
Remember, there are no out-of-pocket fees that you pay to the buyer’s agent. These costs are incurred by the seller. Your agent will research property listings for potential matches to your criteria and schedule showings for you at a convenient time. In addition, they will provide guidance to you during the contract negotiation phase of the selling process. They will also coordinate and schedule the home inspection, appraisal, and closing for you, as well as provide you with referrals for mortgage lenders.
Beginning Your Search
Once you have selected an agent and determined what you are looking for in a home, it is time to begin your active search for homes that interest you. Based on your criteria that you provide your agent, he/she will be able to search their listing database for homes that meet your needs.
While visiting properties that are on the market, compare homes. Every home is unique! Even if every home you visit has all of the main criteria you are looking for, each will have different characteristics. Make notes on each home of what you like and dislike.
Making an Offer
Once you have found your dream home, it is time to prepare an offer to purchase. Your buyer’s agent can provide guidance to you on the price you should offer to pay for the property. Have your agent compare prices for similar homes that have sold in the area recently. This will help you to determine a reasonable price to offer.
In addition to the selling price, the other items to include in the terms of the Offer to Purchase include:
•The amount of earnest money (deposit) to offer.
•Concessions that you want the seller to make, such as a carpet or paint allowance, or payment towards the closing costs.
•Home inspection contingencies.
•A clear definition as to what is to be included with the home, such as appliances or window treatments.
•A closing date.
Don’t be surprised if your initial offer is not accepted. Your REALTOR® will represent you in all contract negotiations until an agreement is reached between the seller and you.
Closing the Deal
Once your offer has been accepted, it is time to work on the final details of purchasing your home. There are several tasks that will need to be accomplished during this phase of the sales transaction:
Home Inspection: Arrange to have a professional come out to inspect your home. They are able to spot electrical, plumbing, and structural problems that may not be noticeable to you at first glance.
You may also need to get a pest inspection on the property to make sure there is no structural damage to the property caused by termites. Your REALTOR® can usually make a recommendation of a reputable inspector.
Apply For A Loan
Once an offer has been accepted, you will need to contact your mortgage specialist to officially apply for a loan.
Items that you will need for your loan application include:
•W-2s and/or tax returns from the past 2 years.
•Proof of gross monthly income for the past 30 days.
•Proof of investment income, including rental incomes.
•A list of creditors, including account numbers, balances, and monthly payments.
•Two months worth of banking statements.
The Final Walkthrough:
Prior to closing, you should be given access to the house so that you can walk through and give it a final inspection. This should be done as close to the closing date as possible, preferably on the morning of the closing proceedings. When you go to do your final walkthrough, your home inspector will not be with you. It is your responsibility to inspect the home and ensure that everything meets your approval.
Things to look for during your walkthrough:
•The seller has repaired items included on the purchase agreement.
•The house is in “as-was” condition (everything is in the same condition as it was when you signed the purchase agreement).
•The house is vacant and clean. The home does not have to be spotless, but there should be no remaining trash or junk left behind in the house or in the yard.
Usually at the time an offer is accepted, or after you have a commitment from your lender, a date and time will be arranged for your closing. The closing procedures will be handled by an attorney of your choosing. The day before, you will be told the total dollar amount you will need to bring to closing by the closing attorney. They will also provide you with any additional information you may need to prepare yourself for the proceedings.
On the day of closing, remember to bring:
•A certified check for the total amount of your closing costs, or the closing attorney may require wired funds. Check with your agent.
•A picture ID, such as a driver’s license.
•Your personal checkbook.
•Evidence of mortgage insurance (if this information has not already been requested).
During the closing, details of the sales contract will be explained to you. If everything meets your approval, you will sign the contracts to finalize the deal. Congratulations! The “buying a home” stage is over…you are now a new homeowner!!!!!!
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