How to Buy a Home in 3 Steps
It seems pretty obvious, doesn’t it? What is there really to buying a home? A lot of people tend to make missteps in the home buying process that can be frustrating, prolong the home buying process, or take them out of the running in buying a home altogether. There are many myths vs. facts out there, and hopefully this article will clear some of them up. Once you recognize the proper steps, the home buying process becomes much easier for all involved, especially the home buyer.
HOME BUYING STEP 1: QUALIFY FOR A LOAN
All too often, the fantasy element of home ownership takes over and many potential home buyers want eagerly to begin their home search without knowing what type of home they can afford. While it is understandable that perhaps you want to dream about the type of neighborhood or home you want to live in, the hard cold facts are that unless you know what you can afford, your dreams may be overshadowed by the reality of your loan amount. It makes common sense to speak with a lender who can guide you with proper advice as to the qualification process, and also counsel you on how to obtain the best loan that you can afford. A lender can provide you with a prequalification, or better yet, a preapproval that will put you in the best position not only to look for a home, but to make an offer on the home of your dreams without delay.
For loan information or to prequalify, click here.
HOME BUYING STEP 2: Contact a Licensed Real Estate Agent
As a home buyer, it costs you nothing (outside of the cost of the home purchase itself) to hire a licensed, professional real estate consultant to help find the home that is just right for you. You want to work with an agent that has experience, has closed many home sales, and has an intimate knowledge of the area you wish to move to. Think of this as ‘hiring’ someone to help you with the most important investment you’ll ever make. Don’t be afraid to ask them the hard questions to insure you will be treated fairly and professionally; and that you feel comfortable knowing your real estate agent will be attentive to your wants and needs as a buyer. When you have found the right agent, request a Buyer-Broker agreement to insure the agent adheres to their professional ethics in helping you from contract to close. Make sure you only work with one agent and one agent only. Do not sign on with more than one real estate agent to help find you a home. This causes confusion, and in some cases legal consequences may result, and does not help you move into your new home any faster.
For information on finding a real estate agent in your area, click here.
Home Buying Step 3: Find Your Home, and Make Your Offer
Your professional real estate agent should be able to help determine exactly what your home buying wants and needs are. If they are REALLY good, they have prepared and have done their homework to make this process somewhat easier and quick. Being completely honest with your agent about your wants and needs will help them find the best home for you within your price range as quickly as possible. Your agent should be able to keep you apprised of homes that are coming onto the market that fit your desires.
When you have found your dream home and are ready to write an offer, your real estate professional will help determine your best offer based on the fair market value of the property you wish to purchase. Stay away from ridiculously low “lowball” offers, and make your offer based on what you and your agent feel is reasonable within fair market value. Be prepared for counter offers, especially if the seller is receiving multiple properties on his/her home. In most states, sellers can entertain as many offers as they receive until they officially accept one, so again, be prepared.
Keep in mind that, in the case of counter offers, know when to walk away from the deal. If the deal doesn’t make sense, goes beyond reasonable fair market value, or goes out of reach of your maximum approved loan amount, consider other options. Typically your loan will only cover up to 80% of the appraised value of your home, so going over that amount will result in you having to come up with the cash to make up the difference. Remember too, that in these economic times, paying more than a house is currently worth means that you may be waiting quite a while to recoup the difference in equity. While home buying is largely an emotional decision, know when to kick in with your professional attitude and remember that this is not only the place you’ll live in, but one of the largest investments you’ll ever make.
Once your offer is accepted, your real estate professional will guide you through the escrow process and stay on top of the necessary pieces of paperwork, contracts, inspections, addendums (as necessary), and contingencies to insure escrow closes in as timely a fashion as possible.
So once you are ready to purchase a home, keep these things in mind. It will make the process that much easier on you!
For more information on home buying, click here.
