The season has come for you to start thinking about buying your first house. Although tempting, try to avoid the instant gratification of browsing for homes online. Before you begin the house-hunt, there are things you need to know to prepare for your home buying journey. Here are six steps to buying a house.
Your first step is to get your financial affairs in order. Getting your financial ducks in a row means polishing your credit score to perfection, saving enough for your twenty-percent down payment, cash for an earnest money deposit, and funds to cover closing costs and other expenses. During this phase, avoid making any major purchases like new cars or expensive furniture. With the money saved for the move and your credit report ready for review, it’s time to move to step two.
Your second step into home ownership involves pre-approval for your home mortgage loan. Pre-approval, contrary to common belief, is best obtained before you begin shopping for your dream house. Pre-approval can help set your budget, send a signal to real estate agents that you’re a qualified buyer, and can prove to sellers that you’re a serious contender for purchasing a home. This process can take time, so not having pre-approval could cause sellers to accept offers from buyers who are pre-approved and ready to move.
Finding the Best Real Estate Agent
Step three is to locate the ideal real estate agent. Not all agents carry the same certifications, specifications, qualifications, or experience. Find an agent who is familiar with the areas in which you’d like to live, and in the types of property, you’re aiming to buy. Interview agents, ask pertinent questions, read their reviews and ratings, and make sure you get along with the agent you think is best. As important as qualifications is personality; you’ve got to like the person with whom you work toward accomplishing your dreams.
House Shopping, Offers, and Negotiations
Step four is the fun part. Now you can start house shopping. Your real estate agent will help you refine your wish list to fit your realistic budget. He or she will then show you properties matching your criteria and will help you draft and submit your offer, as well as assist with negotiations.
Inspections, Surveys, Appraisals
Step five can be frustrating. This step is the waiting period – the ‘tween time from when the seller said yes and when you get your keys. The wait is due to the need for surveys, appraisals, inspections, and legalities such as a title check. The survey is to define the property lines. The inspection is to certify the condition of the structure, and the appraiser determines the current market value of the property you’re buying. Not only do these processes satisfy the bank that the real estate you’re purchasing is equal to or greater than the amount you’re borrowing, but it also protects your interests as well.
Close of Sale
Step six is probably the most exciting part of the entire ordeal. The documents have all been submitted and signed; the title has been deemed free and clear of liens or holds; the house has been cleared of problems, and you’ve reached the closing date.
If the seller has worked out details with his real estate agent, he or she won’t need to be present at the closing meeting. At this meeting, the escrow officer managing the loan funds and administrative processes dispenses out the dough to the appropriate service providers. The title is then transferred from seller to buyer, and you receive the keys to your new house.
By this time, the seller has vacated the premises and has left the house in as good of shape or better than when you saw it last.
When you’re not adequately prepared and don’t know what to expect, the home-buying experience can be more of a frightening nightmare than a dream come true. However, when you educate yourself about the processes, prepare in advance for each step along the way, and exercise patience while the transaction moves along, then you’re armed with information and ready to pursue your piece of the American dream of home ownership.
Your real estate agent is the best source of information about the local community and real estate topics. Give Tory Castillo a call today at 925-718-6658 to learn more about local areas, discuss selling a house, or tour available homes for sale.