10 Simple Steps when Buying a Home
It is hard to believe Chris and I are coming up on our first anniversary of being homeowners! I remember how excited we were when we closed on our house but also how nervous and stressed out we were leading up to those final days. When I think about it now… and how clueless we really were with the mortgage process…it would have been nice to have a simple guide for first-time homebuyers that helped break down the steps you take when buying a home. Fortunately, we had an awesome realtor and mortgage loan originator that helped guide us on the journey towards home ownership.
But if you’re like me and would prefer to know what you are getting yourself into, here are 10 simple steps to take when you are in the market for buying a home:
1) Get pre-approved – Knowing your budget and how much house you can afford should be the very first step you take when diving into the mortgage process. This not only gives you an idea of what price range you have when looking for a house but it also provides leverage for you when putting in an offer. Check out the additional benefits of a pre-approval as well as the list of items you need when you meet with a mortgage loan originator by going to the mortgage page.
2) Find a realtor – Finding a local realtor will be of the most benefit to you since they will know the local area and will be familiar with trends of that specific market. We were very lucky as we had good family friends who worked as realtors. If you don’t know a realtor, my advice would be to ask your family and friends who they would recommend. Referrals on something this important are key!
3) Talk about your needs and wants – Knowing what you need in a home compared with what you would like in a home is very important. Discuss these needs and wants with your realtor so they know exactly what you are looking for. But remember… you may have to give up certain wants. For example we chose to live in the country surrounded by trees, which means, as crazy as it sounds these days, our access to TV and internet is limited (and when I say limited… I mean we only have internet on our phones and only basic TV from an antenna…). Just remember…it is all about balance.
4) Choose and view properties – After deciding what you really need and want in a home… your realtor will find properties that match your requests. After choosing which homes you like the best, your realtor will take you to homes to show you the properties. As tough as it is, try not to fall in love with one house right way… as you are only half way through the process and there are many things that still need to be factored in for you to call it your home.
5) Put in an offer and add contingencies (if needed) – Once you find a house that meets your wants and needs, your realtor will help guide you through the process of writing an offer to purchase and will usually collect a small amount of earnest money. To protect you, the realtor may suggest putting in contingencies which are conditions that need to be met in order for the sale to move forward. Some common examples of contingencies are financing, the sale of an existing home or home inspections. All of these play a factor when the seller is reviewing an offer… but also take into account that the seller may receive more than one offer. For example, we put in an offer on our home the day it was listed on the market… and by the end of the weekend (3 days later)…they had eight offers to choose from!
6) Negotiate terms (if needed) – Once your offer is submitted, one of four things will happen: the seller can accept your offer as it stands, counteroffer your offer with different terms for you to accept, reject your offer outright if they do not want to counteroffer, or if the seller received numerous offers, they may give everyone a chance to put in their best and final offer. In our case, we got to put in a best and final offer and were very lucky to be the chosen offer.
7) Accept the contract – Once the contract is accepted by all parties involved, it is a legally binding contract. You are that much closer to owning a home and moving in!
8) Remove contingencies (if needed) – If your contract included contingencies, now is the time to get them removed. For example if you had a home inspection contingency, you would hire a certified home inspector to make sure the property meets necessary requirements. If contingencies are not satisfied, it is a breach of contract and you can either walk away from the property or you can either work with the seller on getting things fixed before the sale if they agree to it.
9) Closing – After your lender gives you the green light, you are ready to close on your house! Typically the closing meeting involves the selling or closing agent, your lender, your realtor and of course you! At the closing meeting you’ll review and sign all of your financial documents and your lender will provide the funds covering your mortgage loan amount to the closing agent. Many times you will need to provide evidence of homeowner’s insurance and inspection at the closing meeting and this is also most likely when you will provide a cashier’s check to cover your down payment, closing costs, prepaid interest, taxes and insurance.
10) Welcome home! – Congratulations! After completing these simple steps, you are considered a homeowner and can begin making the house you fell in love with a place to call home! Bring on the housewarming parties!
Although the process can seem daunting, our experienced mortgage originators are great at making the whole process run smoothly, answering your questions and calming your nerves! They are just as excited as you are during the process. Don’t hesitate to contact them to start the ball rolling!