Buying a home is one of the most exciting milestones of your life. To prepare yourself for this moment, you need to know what to expect during the process. This step-by-step first time buyer’s guide created by your agent will help reduce the stress of buying a home and help you enjoy the journey as much as possible.
Do you already know where you want to buy? If you want a condo, townhome, or single-family home? Which features do you like and dislike? What’s available on the market now? If you answered no to any of these questions, now is the time to start researching. In addition to looking for homes that interest you, also take note of any changes in asking prices. This could give you valuable insight into housing trends in specific neighborhoods and help you when the time comes to make an offer.
Notice I said to decide on your budget—if you’ve been renting, you may overlook new expenses like property taxes, insurance and HOA dues.
Just because you think you can afford a certain payment every month doesn’t mean the mortgage company will agree. Just as they may approve you for too large of an amount, they may also approve you for a lesser amount or deny you a mortgage altogether. Lack of time at a job, insufficient credit, past bankruptcies, or other financial issues can cause major problems when trying to secure a mortgage. Before you get your heart set on a home, talk to a mortgage professional to find out what amount you can qualify for. This will also be an advantage when you make an offer on a home, as some sellers won’t entertain offers from those who aren’t already prequalified for a loan. In the past few years, due to the competitive market dynamics, many buyers get Pre-Underwritten/Credit Approved in addition to a standard Pre-Approval. When you are Pre-Underwritten, this extra step provides buyers with the ability to comfortably make an offer without a loan contingency to improve your chances of winning in a competitive offer situation if you desire to do so. This extra step is highly recommended so you are best positioned to win no matter the market conditions.
Can you shop for, look at, and ultimately make an offer on a home without a real estate agent? Technically yes, but why would you when it costs you nothing for an agent like me to take much of the stress off your shoulders? Not only will I help identify properties you might be interested in, arrange showings, and ultimately handle the offer process, but I also have a knowledge of the market that you don’t possess. I may be able to steer you away from certain homes or neighborhoods, suggest hidden gems, or give you pointers that will help you find your dream home for the right price. I also have exclusive access through my network groups to off-market properties that you otherwise wouldn’t be aware of.
This should be the most enjoyable step of the entire process (other than moving in!). I will arrange showings of homes you’re interested in that are within your price range. Take notes about what you like and don’t like, and make sure to pay attention to details. I will share my thoughts on value, neighborhood, condition, updating needs and when we find a home you like, review disclosures with you. But, don’t limit your inspection to the home itself. Make sure to take time to explore the neighborhood and keep an eye on traffic at certain times of the day, the parking situation, and how close it is to necessities like schools and grocery stores.
In our market, homeowners often prepare a disclosure packet in advance of listing the property for sale that can subsequently be shared with prospective buyers. This will usually include a slate of inspection reports in addition to standard seller disclosures. The concept is to smooth the process by providing prospective buyers with all pertinent and material information up front so that buyers know what they are getting into prior to submitting an offer and thus reducing the chance that the transaction falls apart due to new discovery. The burden is on you the buyer to review all these disclosures, but I will also do so and go through them with you. In a competitive situation, it also means that buyers are positioned to improve their offer by potentially making an offer without an inspection contingency if they so desire. If you are submitting an offer without an inspection contingency, it is also pertinent that you make sure that you can get a satisfactory insurance policy prior to making your offer. Depending on the location of the home you are interested in, Fire Insurance can be tricky and/or costly to obtain so you’ll want to make sure you know what the situation is as it could impact whether you decide to proceed or not, similar to inspection reports.
There are still cases where disclosures and inspections are not provided upfront and under these circumstances your offer will likely be contingent on having the home inspected to ensure there is no major structural damage or large repairs needed. I can help you arrange this, and you can schedule it within days of making an offer. If there are no major issues, the process goes to step eight. If there is, you can renegotiate your offer based on what needs to be fixed, or you can withdraw it.
Once you have found the perfect home, I’ll work with you to craft a winning offer based on successful strategies and the value of comparable homes on the market. Depending on what the home is listed at and whether the current environment is a buyer’s or seller’s market, your offer may be below, at, or even above the asking price. You may include contingencies or you may offer contingent-free. Each situation is different, but you can be sure I will put my years of experience and deft negotiation skills to work for you every step of the way. Once your offer is accepted, the house will go into escrow.
Once you are in escrow, you will need to reconnect with your lender to finalize any details and satisfy any lender conditions. If you are Pre-Underwritten, the bulk of this will already be complete. One such condition will be providing the lender with your insurance policy details. At this point, your lender will order an appraisal so they have their independent value of it. The appraisal is to ensure that all parties involved are paying a fair price for the house. Lenders will only lend on the appraised value of a property which can differ from the initially agreed purchase price.
No one looks forward to all the paperwork involved in buying a home, but it’s a necessary part of the process. Fortunately, everything will be arranged by me, your lender and title company and, when you’re finished, you’ll know you are the legal owner of your new home.
After signing the final paperwork to complete the purchase, you are now the owner of a new house. It may take a few days for your loan to be funded once the paperwork has been returned to the lender, but once that check is delivered to the seller, you’ll be all set to move into the home of your dreams.
Taking a personalized approach, Tom aims to make the real estate transaction process easy and smooth for buyers and sellers alike. Hardworking, honest, experienced with an exceptional reputation within the local industry and insights only a native has, there is no better guide for your real estate journey. Tom would be honored to earn your trust and serve as your real estate advisor. Don’t hesitate to contact him today!
