Home Buying Steps to Success
- Do some hard work up front
You and your partner need to spend time thinking and talking about why you want to buy a home. Do you want the responsibility that comes with home ownership? Where do you want to live? In what type of home? Single family detached? Manufactured home? New construction? Or existing home? What things do you need in a home? What things would be nice to have but not essential? How much can you afford to pay each month towards your mortgage? Check your credit scores; you’ll need good credit to get a mortgage. Do you have a steady job or source of income? You’ll need this too in order to get a mortgage.
- Find a great Realtor®
A Realtor® should be an expert in the neighborhoods you’re interested in, the home buying process, and available to guide you all along the way. She should set expectations about what you can expect from her and tell you what you’ll need to be prepared to do. Finally, you should be able to trust your Realtor® and feel comfortable working with her.
- Choose a lender
If you don’t already have a lender, such as a loan officer at your bank, your Realtor® should be able to give you names of a few mortgage lenders you can work with. The goal is for you to get pre-qualified for a loan so you can begin the process of buying a home. Lenders should be experienced working with first-time homebuyers and the loan programs that fit your specific needs. Outside of your Realtor®, your lender will be the most important person you will work with during the home buying process.
- Get Pre-approved for a loan
You’ll need to work closely with your lender to give him the documents he needs to determine if you’re a good candidate for his company to loan you money. You’ll need to give him W-2 forms, income tax returns, and other documents that verify your income sources. In addition, your lender will pull your credit report to prove that you have a history of handling your credit responsibly. Now is not the time to hide anything from your lender. If you are up-front with your lender she can help you fix any credit issues and take steps to improve your ability to get a loan. If you qualify for a loan, you’ll get a pre-approval letter telling you how much money you can borrow. Your Realtor® will need your pre-approval letter in order to find you the right home and make an offer to the seller.
- Look at homes.
This is the fun part! You’ve already made some important decisions. You know where you want to live, what type of home you want, the home features you want, and how much home you can afford. Your Realtor® will give you lists of homes that meet your needs and at the price you can afford. To save time, you can look at homes she shows you online, right in her office. You’ll be able to dismiss many possible homes by looking at photos and reviewing the descriptions with your Realtor®. Then you can go see the houses you’re really interested in.
- Make an offer
Once you find the home you want to buy, you’ll work with your Realtor® to make an offer to the seller. Your Realtor® will guide you through the offer you will sign in order to purchase a home and submit the offer to the seller on your behalf. Your offer will include all the terms, including the price you agree to pay, how much money you may put down initially, and the home inspections you will want to have done.
- Negotiate a final contract
It’s very likely that the seller will make you a “counteroffer.” She may agree to some of the terms you offered, but not all. You may agree to accept the seller’s counteroffer or want to make your own counteroffer. Your Realtor® will help you think through your options and continue to negotiate on your behalf until both sides reach an agreement and sign a final contract.
- Stay on task and meet all your deadlines
The final contract will spell out which side will do what and by when. Buyers almost ways have the most things to do and strict deadlines buyers must meet. Your Realtor® will work with you to make sure you stay on task and remind you about all your required deadlines. Your Realtor® will work closely with others that will play a role on your behalf, such as your lender, an appraiser and property inspectors, but it will be your responsibility to complete your tasks on time. These tasks will include hiring the home inspectors and giving your lender all the documents she asks for as soon as you can. These documents will include many things such as your bank statements and tax returns. Your goal is to get final approval for your loan and have any repairs made to the house, which were uncovered during your home inspection period that you and the seller ꟷ and sometimes your lender ꟷ have agreed upon. The contract should give you the right to walk through the home to make sure these repairs have been made.
- Close on your new home
The last step in the buying process is to close on your home. There may be a flurry of last minute details that require your attention. Most often these will be initiated by your lender or the title company responsible for what’s called “closing.” But you’ll be told when and where you’ll need to be in order to sign all your paperwork ꟷ and there is a lot of it. Your Realtor® should be there with you, and after all the legal papers are signed, you’ll be given the keys to your new home. Congratulations!