So many questions can pop into a buyers thoughts; Where do I start, how much can I afford, will I find the right home, am I missing anything that is for sale…. the questions can seem endless at times. This is when your real estate agent will/should educate you with any concerns and questions that you have.
GETTING STARTED:
Have a Down Payment Saved
In order to purchase a home, people usually will need some cash for a down payment. How much? Speaking with a local lender and a real estate agent can help to get you started going in the right direction. Unfortunately, many people have other obligations and debts that make it difficult to save the type of money that is needed. This is why one of the first steps to buying a home is to save for the down payment. Buyers may choose to open a savings account in advance, or the down payment may be given as a monetary gift from a family member. If you are a first time home buyer, there are also ‘First -time home buyer programs’ you can check into, or if you live in Washington State, Check with your local lender, real estate agent, or contact the Housing Finance Commission for information for assistance with any questions on qualifying for any of these programs.
Decide on a Location and Type of Home to Buy
Often people choose a location-based off of factors such as family and work. Although a person may have a general idea of where he or she would like to own a home, it is important to consider all of the options. A person should visit potential locations keeping in mind his or her family’s lifestyle and commute. When determining what type of home is the best fit, a person should take into consideration the lifestyle that he or she lives, current needs – such as rooms – and future needs of the family if it should grow. Have some idea of what you would like your realtor to search for; keeping in mind that it is ok to change your mind along during the process. Sometimes, viewing homes in areas that hadn’t been previously considered, may end up being the preferred choice.
Get Pre-Approved or Pre-Qualified
Meet with lender(s) — If you are in the process of ‘shopping around’ for your lender, only have your credit ran once. Let other lenders know that you have already had your credit checked. If your credit is checked too many times, it could potentially lower your credit score.
Before a person begins the process of buying a house he or she will need to know what they can afford. Typically this comes down to how much of a loan he or she can obtain. One route to take is to get pre-qualified. The pre-qualification process is one in which a mortgage company interviews the home buyer and asks questions about the individuals finances, including debts. An estimate of how much a buyer can afford is given at the end of the interview.
Pre-approval is yet another option that is available. For pre-approval a credit check is run and the amount of available down payment is taken into consideration. The lender also looks at any owed debt and even if the person is a first time home buyer. This results in an estimated pre-approved amount that is typically favored over pre-qualification.
Choose a Real Estate Agent
An agent will understand the real estate market and lead homebuyers to the homes that they want to see. As a result this will save the home buyer time and frustration. The recommendation of friends or family members is one of the best ways to choose a real estate agent. If there are no recommendations, interview 2 to 3 agents (or more if necessary). The agent should be a buyer’s agent dedicated to working in the best interests of the buyer. The agent should also be someone who listens and has no problem answering any questions that are asked of him or her. They should keep home searches in the monetary range that you have provided to them— not trying to show homes that quite a bit higher in price than you would like to spend.
Visit Available Properties
Of the steps to buy a house, this is often one of the most enjoyable. The real estate agent will locate and screen homes with the buyer and present him or her with the options that best match the established criteria. The agent can set up a date and time to visit potential homes. During this time the buyer should not feel pressured or make hasty decisions.
Making the Offer
Once the buyer has found the perfect home, it is time to make an offer on the property. This is an area in which a real estate agent is invaluable. He or she will base the offer price off of comparable homes that have sold recently in the area. The agent will draft a contract that is agreeable to the home buyer. The contract will include the price of the offer, as well as terms that the seller and the buyer will need to meet in order to achieve a successful transaction. The agent will ensure that the contract meets all of the necessary legal requirements. The agent will present it to the listing agent, and the listing agent will present it to the sellers…at this time the sellers will decide if they accept the offer or if they are going to counter the offer. This negotiation process could reach mutual agreement quickly or sometimes several counter offers may have to happen before mutual agreement will take place.
Secure the Mortgage
Once the offer reaches mutual agreement, the buyer will need to secure the mortgage. This is done by complete the mortgage application, usually with the lender who has pre-qualified the buyer(s).
Inspection
In Washington State, once mutual agreement has been reached, the buyer has 10 days to have the home inspected by a licensed inspector. The real estate agent can help locate a reputable inspector for the task. A qualified inspector will check the foundation of the home, plumbing, electrical systems, the roof, walls, and visible insulation. An inspector will also look for signs of mold, asbestos, and pests. Home inspections are recommended for re-sale homes and new construction homes. The real estate agent will prepare all the necessary paperwork and see that the time frames limits are met.
Appraisal
Once the inspection has been satisfied, the lender will be notified that it is ok to order the appraisal.
Obtain Insurance
The buyer will need to purchase home owners insurance for the property. This will protect it in the event of fire, theft, or other potential liabilities. This is required by mortgage lenders. This should be equal to the home’s full value.
Close
Prior to the closing date, the buyer will want to verify with his or her agent, lender, and escrow company that all of the necessary documents have been signed and terms met. If they have not this should be taken care of immediately to ensure that there are no last-minute problems. The buyer will also want to verify what forms of payment are acceptable. On the closing date, closing costs and fees will be paid. The real estate agent will be available to help and walk the buyer through this.
Nancy is a client first real estate agent in Tri-Cities, WA. If you have any questions on owning homes, living in the Tri-Cities, or purchasing your first home, you can contact her directly at: