Buying your new home can be an exciting adventure! Our home buying guide will help you understand the process – from steps you should take at the beginning through closing on your new home. While there are a lot of details involved, taking the right steps and making informed decisions will make your purchase go smoothly as possible.
Define Your Goals
Before beginning your home search, make sure to have clearly set goals: desired neighborhoods, type of home, must-have amenities, etc. As you get into the market, you may need to be flexible on some of these requirements, but starting with a best-case list will be helpful.
Examine Your Finances
Before purchasing a home, it’s important to make sure you have your finances under control. Your credit score and debt to income ratio will be important to determine your rates. Prepare by making a detailed budget and ensure that you have savings and reserves in place to support your home purchasing goals. Keep in mind that the tax rate will definitely impact your payments and your closing costs. Many communities have HOA’s as well as cap fees to be paid at closing.
Get Pre-Approved
Call several mortgage lenders – you’ll find differences in rates, fees, and customer service. You can compare different their offers within a 14 day period and it should only count as one inquiry on your credit. Finding the right mortgage lender is important. Check reviews as well to make sure you’re choosing someone with a track record of satisfied borrowers.
Pre-approval is a good idea at this stage – you’ll have more power as you submit offers and negotiate with sellers if you are already approved for a mortgage. Use estimated closing costs to validate you have enough money set aside for this process.
Hire a Real Estate Professional
Take some time to do some research here!
By this point, you have a good grasp of the type of property you’re looking for and the purchase price you can afford. You may even interview agents to find someone who regularly sells similar homes. Again, look for social proof and check out reviews. If you’re shopping with a spouse, make sure both of you agree on the agent. Home-buying can be a storm and you want a good captain that you’ll both trust!
Search for Homes
Work with your agent to search homes that meet your goals and criteria. You’ll also want to make sure you view homes in person – pictures are awesome, but can sometimes be misleading! Don’t get frustrated if you don’t find a home immediately – each showing gives you a chance to learn more about what you can get in your area at your price point. You’ll find a place to call home.
Make an Offer and Negotiate
Once you’ve found the home you’d like to buy, it’s time to make an offer. But before you do, have your agent prepare a comparative market analysis to see what other homes in the community have sold for. That way your offer will be in line with current market conditions. Here’s where a good agent earns their money – showing you the home is the easy part. Guiding you through offer and closing is where great agents shine! Have your earnest money, and option fee ready.
Sellers can counter your offer, inspections can reveal possible repairs, and you can suddenly find your budget at risk and maybe even question if this is the right home for you. Above all, stay calm and continue to communicate with everyone involved. Check your budget, your emotions, and your buying partner to make the next right steps.
Secure Your Financing
You’re almost there – remember, your lender wants to ensure that this is a good move for everyone, so they will ask for more information about proof of income, the condition of the house, or your credit history. It is going to feel like they are asking you for the same things over and over again. Keep a file of everything so it will be easy to resend. Providing accurate and timely responses keeps the process moving and gets you to your desired outcome the fastest. Additionally, the appraisal report will be done during the first couple of weeks depending on the outcome we may have to renegotiate the price.
Close the Deal
The timing for closing can vary, but the average is 45 days. Typically, within 48 hours prior to closing, you’ll do a walk-through to check that all agreed-to repairs are completed and then a final walk-through before closing to make sure that the home is in the expected condition.
You can expect to meet with your lender to finalize the paperwork. Buyers and sellers typically close separately. A representative from the title company, and your Realtor will be there. During the closing, all paperwork will be finalized, including: the deed, title, financial/funding, closing statements, insurance, contract, etc.
At this point, all the documents gets signed, notarized and approved, this is closing, then there is also funding -when the money goes to the correct party. When both of those happen, then you’re done with everything and you will be ready to move into your new home!! Congratulations!
