The process of buying a home can be (if we are honest) tough! But if you are prepared to work at it, have the right help by your side and tackle things in an organized way- then you will be successful. Check out the process below. This is an outline of the home buying process and it has a few tips will help you save time, effort and money!
- Get Pre-Qualified – This cannot be stressed enough! A buyer who is not pre-qualified for a loan will not be taken seriously by a seller. Getting pre-qualified by a lender helps you realistically know how much “home” you can afford so that you don’t waste time looking at homes you can’t afford. People are worried about this part of the process and often leave it to the last minute. However, by planning ahead and being organized with your finances, getting pre-qualified can take away a lot of this stress. Be prepared by correcting any errors on your credit report, paying off credit cards with small balances and by not making any big purchases – such as a new car for example – throughout the home-buying process. See more about this in the Mortgage section of the site.
- Start Shopping for a Home with an experienced Real Estate Professional – While shopping for a home, think resale. Due to the current economy, with job security being an issue, many people are moving, so why would you tie yourself down to a house that would be difficult to sell? Currently, people live in their homes for 5 to 7 years, so keep that in mind while searching for the right home. Also remember when you are searching for a home, aesthetics can be changed. Look past the current owner’s decor. Once you have viewed houses you are interested in, start creating a shortlist of properties that have features you desire. Making a shortlist will help you narrow down the houses and find the right one for you.
- Don’t wait! – How often do you hear people talk about loving a home and waiting to put in an offer and then losing that home? Make the decision to purchase sooner rather than later. Compare sales in the neighborhood with your Realtor who will guide you with the appropriate asking price for your potential purchase. This is called using “comparable sales” which are recent sales of homes that compare closely to the one you are looking to buy. Specifically, you want to compare prices of homes that are similar in square footage, garage spaces, the number of bedrooms and baths, and lot size.
- Always, always, always have a home inspection – This is an extremely important step that can help you avoid issues with a home down the line. Once you have a home under contract order a home inspection and if your contract has contingencies based on an inspection, then any issues that arise can allow you to renegotiate or cancel your contract. Don’t get confused by a home inspection and an appraisal. An appraisal is ordered by your lender to determine a detailed true value of the property for them to use as a basis for how much they will lend. Make sure you get a copy of the appraisal as it will contain so much information about the home that it is always useful to have for reference. The appraisal is an important part of the process that is often overlooked, but it can make or break a deal as the value an appraiser comes up with is the basis that a lender will use to lend on, if the home values low, then you will likely have to come up with more money to make the purchase the home.
- Closing – This is where it all happens. Once all parties are happy, the process will move towards closing day. Now is the time to pay attention and read all documents carefully. The closing table is your last chance to ask any questions or make any last minute changes before everything is signed and finalized and money is exchanged.
Of course, this is just an overview of the buying process, every transaction is different and there usually is more to it than these 5 steps. Your Realtor will be able to guide you through the process and be on hand to answer any questions you may have.