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The Buying Process

Determine what you want? In my opinion this is the first step in buying a home. I am not saying you need to know exactly what you want but you should ask yourself “Why do I want to buy a house now?”,“What changes to my current living situation?” and “What is my timeframe in purchasing a home?” These questions will help you develop a clear objective for your home buying experience. Determine what you can afford? Write down your current monthly budget. Look at and determine what you are looking for in a monthly payment. Determine what kind of funds you have available to make a down payment. Gather information about your current debt and current income. If you know a good loan officer give them a call. If you don’t know a good loan officer ask your Realtor, Friends, and Family, who they recommend working with. Then interview the loan officers. Make sure to ask the loan officer about closing cost. Many people forget about this and only pay attention to the interest rate. The loan officer should be able to help you with determining what you can afford. If you are planning on buying within the next 3 months then go ahead and get pre-approved. Remember just because you are pre-approved for a certain amount doesn’t mean you want to spend that amount. This is why I suggest determine the monthly payment you want prior to calling the loan officer. Looking at Properties? Now that you have your finances in order, you should be ready to start looking at houses. I suggest you make a list and prioritize what you are looking for in a home. It is not likely that you will find everything you want in a home so it’s important to prioritize what is most important. Your Realtor should be able to provide you information about the homes. Here is a list of items I would want to know: (1) When did the property go up for sale? (2) What are similar properties in the neighborhood selling for? (3) How long did the owner live in the property? (4) What price did the owner pay for the property? (5) What is the average price per square footage in the neighborhood? (6) What is the average sales price as a percentage to list price in the area? This will give you a good idea about the price as well as your ability to negotiate the price you want for the property. Remember when determining a price for a property the biggest factors is location and size. Although amenities make a house look nice they tend to depreciate in value over time. It’s Time To Make An Offer You have found a house you liked and it’s time to make an offer. Here are some questions that you will need to ask your self? What price do you want to offer? Do you want to offer Earnest money? What inspections do you want to make? How much time will you need for the inspections? What personal items do you included in the sale? (ie. Fridge, Washer Dryer) When do you want to close? And when do you want occupancy? How much time are you going to give the owner to consider your offer? In every market place these items may vary, so make sure to discuss these items with your Realtor. The process from here can also vary depending on market place. Usually, the Realtor will right up the offer with you. Then will either deliver it to the owner or if another Realtor is involved to the owners Realtor. The owners will accept, reject or counter the offer. The contract can go back and forth a few times before an agreement is made. The Offer is Accepted You have an accepted contract. What do you do now? There are a couple of items that need to be completed. Your loan officer may need items from you. Make sure to call the loan officer and get him all items that are needed. Schedule the inspections. I suggest you get them out of the way as soon as possible. You will need home insurance for the property so contact your insurance agent to get coverage. Make sure anything that you pay for prior to closing that you keep a copy of the receipt and bring to closing. From here there are many items that your mortgage company needs to take care of. You may want to check to make sure the process is moving forward. The mortgage company will order appraisal and title work. You want to make sure the mortgage company is moving along on this process. All these items your Realtor should be helping you with. He should give you updates and check with the mortgage company periodically. The Loan Has Been Approved And It Is Time For Closing The closing will be scheduled. A couple of items need to addressed prior to closing. First item is the transfer of utilities into your name. The 2nd item is how are the keys going to be hand off to you? If you get occupancy at Closing usually this is not an issue but you want to know this prior to closing especially if you are getting occupancy days after the closing. Normally, it will be in an office setting and the both the seller and buyer will be present. Sometimes this isn’t possible and separate closing will need to be preformed. As a buyer your loan officer will give you the amount of money you will need to bring to closing. In most cases the title company will need the money in form of certified check or cashiers check. You will need to bring a picture ID. Then you will sit down and sign the documents. Congrats! You have purchased a home!! The idea of this blog is to give an example of the buying process. It can vary in different markets and every purchase is different. This may cause additional items need to complete the deal. If you only take one thing from this blog, it should be contact a Realtor. They will be able to walk you through the process.