A Step By Step Look at Home Buying

Step 1 - Get Your Credit/Finances in Order

Your credit report is a primary factor in determining what interest rate you will receive and how much the banks are going to be willing to loan you toward the purchase of your home. Make sure you check your credit and ensure there are no issues before starting the home buying process. Know your financial history before you apply for a mortgage, as errors on credit reports are common and often require a lot of time to clear up.

Step 2 - Get Familiar with the Mortgage Industry

We can refer you to several lenders who will both explain the process and will be able to offer you a good faith estimate. You should find a lender you are comfortable with and a loan program that fits your needs.

Step 3 - Get Pre-Approved for a Mortgage

Once your credit/finances are in check, apply for a pre-approved mortgage to establish how much house you can afford. It also helps to have this pre-approval when negotiating your contract as sellers tend to favor an offer that is pre-approved.

Step 4 - Determine Your Wants and Needs

Take a piece of paper and divide it into three columns. If you'll have a co-owner, have that person make a list too, but don't share ideas just yet.

Column 1 - List Must-Have Features:

If the house must be located in a specific neighborhood or school district.
If the house must have 3 bedrooms, a 2 car garage, a large kitchen, a view.
If there must be no restrictions against a home-based business.
If the home must be one level, with few or no steps.
List every feature you feel is a must.

Column 2 - List Features You Would Like:

A pool or a screened patio.
Whirlpool tubs, walk-in closets.
A certain type of architecture.
Preserve lot, lake view or cul-de-sac
List all features that are important to you--but that you might be flexible about.

Column 3, List Features You Do NOT Want:

A home located next to a highway or in a congested area.
Certain types of architecture.
Homes that need a great deal of work.
List all features you absolutely cannot accept.

Review your list. If your co-owner made a list, compare them to see if your priorities match. If they don't, you'll need to compromise, revising your lists so that both of you are happy.

Making a list is a good exercise because it forces you to think about your wants and needs. We can almost guarantee your list will change and evolve when you actually begin to look at houses. Even home buyers with an unlimited budget rarely find the "perfect" home.

Step 5 - Select a Qualified Real Estate Agents

Basically, there are many agents, but only Realtors adhere to the professional standards or code of ethics established by the National Association of Realtors.

Find an agent that you feel comfortable with. Do your communication styles mesh, do they understand your needs?
Find an agent who has a good website that provides you with ample educational resources and information about the area.
Find an agent who will offer you prompt professional service.
Find an agent who is knowledgeable and will help guide you through the real estate process. Ask how long they have been in the business.
Ask for referrals. Don’t do business because you like the website. Let previous customers tell you about their experience.

Step 6 - Start Searching for a Home

As Realtors, we have many tools at our disposal to help you through the process. We can help you by searching the multiple listing service (MLS) system to find listings that match your desired criteria, providing you with Comparative Market Analysis (CMA) reports and education you about the area.

Hint: You can use this website to search and find any home on the MLS and we can make an appointment to show you any property in the area!

Step 7 - Make an Offer

Here are some tips that can help you get the best deal when it’s time to make an offer on a home. No matter what your strategy is, you should have a good idea of the home's market value before you make an offer.

Lowballing it: Be realistic, some seller's take a lowball offer as a personal insult and may not be as anxious to deal with you on your next offer. That's fine if low is all you'll go, or if the property is truly overpriced, but it can create problems with future negotiations.
Being generous: Come in too high and you may not find the seller's low point.
Helpful Advice from your Agent: A great way we help is to provide you with enough information and advice to assist you in determining the best price to offer. We can run comparables for you and will be involved in offer strategies.
Asking prices: Advertising gives you a feel for average asking prices, but your focus should be on sales prices. You'll find them recorded in the tax records or on multiple listing recaps of sold properties.
What about tax values? Tax valuations are not a good measure of a property's market value. Your community might have a general guideline, such as tax value = 80% of market value, but the figures are not usually reliable. Ask your local tax assessor for details about your specific area. Take a look at a home's tax value, but never assume it matches the market value of the property.

Other factors that affect price

How long has the house been on the market? If only a short time the sellers might not too motivated.
How does the house compare with others for sale in the same neighborhood? Appraisers are now considering market penetration by looking at how many homes are on the market in the same area.
Is the house in need of repairs or massive updates? Updating items such as insulated windows, plumbing and electrical systems, kitchens, and baths can be costly.
How much time is left on the roof?
What about the neighborhood, do you foresee home values climbing, staying the same, or possibly taking a downturn?

Bottom line

Analyze each home's condition and compare it to others on the market. Your final offer will likely involve a good deal of gut instinct. Is it the house for you? If you've been searching for a home for awhile, you will probably know the answer to that question the minute you walk in the door.

Step 8 - Home Inspections and Other Tests

In our market, inspections take place after an offer is finalized. It's critical to decide which inspections and tests you want to perform.

Talk with your real estate agent or other advisor to find out when inspections should be handled and if additional types of testing are important for your specific area.

Step 9 - Obtain Homeowners or Hazard Insurance

Whether you are buying a condominium or a home, lenders require insurance prior to close. Your agent should be able to refer you to competent insurance agents who can recommend appropriate coverage. In most cases, you will need to pay the full year's premium prior to close.

Step 10 - Closing

At closing the transfer of title will take place and you will sign the final paperwork to purchase your home. You'll need to bring your driver's license and a certified or cashiers check for any funds required at close. Congratulations!!!