The guide to buying your first home
What an exciting time. Time to buy your first house, your very own house (and mortgage). A place to call your own. It’s a big move, literally, and figuratively. The journey isn’t always the easiest, but with some work up front you will help make it easier, and when you get the keys to your new home — that can be one of the most rewarding feelings ever.
The key to getting there? Knowing the home-buying process. Knowing what tools are at your disposal and most importantly, creating relationships with experts who can help you get the job done. Below are some major steps you’ll take during the home-buying process as well as an explanation of the relationships and experts you’ll need along the way.
DO YOUR HOMEWORK
Sure, everybody wants to jump right into open houses, however, this is not the place to start. Before you even set foot into a foyer, you should identify your list of “musts” and “wants.” This list is an inventory of priorities for your search. And there’s so much to decide: Price, housing type, neighborhood and school district, just to name a few.
If you’re planning to buy a home with a partner (in life or in real estate), you want to be on the same page. If you’re not, you’ll be less able to give your Realtor or lender the information they need to help you. You also risk wasting time viewing homes you can’t afford — or don’t even want in the first place.
FIND A GREAT REALTOR
Your relationship with your Realtor is the foundation of the home-buying process. He or she is the first expert you’ll meet on your journey and the one you’ll rely on most. That’s why it’s important to interview Realtors and find the one who’s right for you. Ask friends and family for referrals or search for online reviews.
CHOOSE A LENDER
Once you’ve found your Realtor, ask him or her to recommend at least three mortgage lenders that meet your financial needs. This is another big step, as you’ll be working with your lender closely throughout the home-buying process. It is important to get preapproved for a home loan before finding that perfect house so you are ready to make an offer.
CHOOSING A LOAN
Once you’ve decided on a lender (or mortgage broker), you’ll work with your loan officer to determine which mortgage is right for you. You’ll consider the percentage of your income you want to spend on your new house and you’ll provide the lender with paperwork showing proof of income, employment status and other important financials. If all goes well (fingers crossed), you’ll be preapproved for a loan in no time.
GO TO SHOWINGS AND LOOK AROUND
Now that you have both a Realtor who knows your housing preferences including budget — and a lender to finance a house within that budget — it’s time to get serious about viewing homes. Your Realtor will provide listings you may like based on your parameters (price range, ZIP codes, features) and also will help you determine the quality of listings you find online. Then comes the fun part: showings, which give you the unique opportunity to evaluate properties. Your Realtor will help you navigate showings, whether virtual or in-person.
MAKE AN OFFER
Once you find the home you want to buy, you’ll work with your Realtor to craft an offer that not only specifies the price you’re willing to pay but also the proposed settlement date and contingencies — other conditions that must be agreed upon by both parties, such as giving you the ability to do a home inspection and request repairs.
NEGOTIATE, NEGOTIATE, NEGOTIATE
Making an offer can feel like an emotional precipice, almost like asking someone out on a date. Do they like me? Am I good enough? Will they say yes? It’s stressful. Some home sellers simply accept the best offer they receive, but many sellers make a counteroffer. If that happens, it’s up to you to decide whether you want your Realtor to negotiate with the seller or walk away. This is an area where your Realtor can provide real value by using his / her expert negotiating skills to haggle on your behalf and nab you the best deal, though in today’s market very little haggling is happening.
GET THE PLACE INSPECTED
Most sales contracts include a home inspection contingency, which means you’ll hire a licensed or certified home inspector to inspect the property for needed repairs and then ask the seller to have those repairs made. This mitigates your risk of buying a house that has major issues lurking beneath the surface, like mold or cracks in the foundation.
ACE THE APPRAISAL
When you offer to buy a home, your lender will need to have the home appraised to make sure the property value is enough to cover the mortgage. If the home appraises close to the agreed-upon purchase price, you’re one step closer to settlement.
CLOSE THE DEAL
The last stage of the home-buying process is settlement, or closing. This is when you sign the final ownership and insurance paperwork and make this whole process official. When it’s all said and done — break out the champagne. You have the keys to your new home. When it’s time to buy or sell your home contact a member of the Stark Trumbull Area Realtors.