Home Buying Process in 9 Easy Steps
1. CHECK YOUR CREDIT
Most people can’t buy their homes with cash. Your home is a major investment in your life and likewise a very costly venture. You will need a bank to help and that starts with a personal credit check. According to federal law you are entitled to one free copy of your credit report every year. You can obtain one by visiting Annualcreditreport.com. Scores range from 300 to 850. The higher your score the better your rates and larger your budget. If you find any errors on your report you can dispute them. Cleaning up your report will pay big dividends in your home buying endeavors.
2. MAKE A BUDGET
Understanding how much house you can afford will depend on many factors.
First, you need to know how much you can pay in monthly payment. You can visit a mortgage calculator to estimate the house price with corresponding monthly payments. Be advised that owning a home is more costly than your monthly payments. There are taxes, insurance, repair costs, and yearly maintenance that comes with any house you own. As a rule, the larger the house the larger each of these costs will be!
Second, YOU NEED A DOWN PAYMENT. If you choose an FHA government backed loan, you can pay as little as 3.5% down. If you choose a conventional loan you can expect your lender to demand around 10%. As you prepare to search houses make sure you’re saving for a down payment at the same time.
3. FIND A LENDER
In many ways your entire home buying experience will be dictated by the lender you choose. Not all lenders offer the same rates and mortgage costs. Shop around to several lenders both big small to find the best rates. Something as simple as a 1/2% on a 30 year loan can mean the difference in thousands of dollars spent. Make sure you obtain a letter of credit approval to have on file when you make an offer.
4. FIND A REAL ESTATE AGENT
For the buyer a licensed Real Estate agent costs you nothing and gets you a whole lot. It is important to have someone who knows the market in which you live to help you locate, price, and negotiate the right house for you. I have labeled my website and all of my marketing Buy Well Today because I know personally the importance of buying right. “It’s not how you sell but how you buy” is a well known and well proven mantra in the Real Estate business. Failing to have the right information when purchasing your home can have huge ramifications down the road. Every Real Estate purchase is an investment. Get a licensed Real Estate agent that understands these concepts to help you Buy Well Today for a very bright future tomorrow.
5. FIND THE RIGHT HOME
No two houses are the same. Even if you compared two houses with the exact same floor plan they still wouldn’t be the same. Factors like location and overall maintenance can make a big difference in the price of a home. Your agent should have a really big ear to understand what you are looking for and at what price your willing to spend. Have your agent help you make a game plan of different priorities you might have in a home and then let those priorities evolve as you look at houses. I help my clients start this process with a Buyer Questionnaire that helps me search for the right homes to meet their needs. The questionnaire rarely stays static as the priorities tend to change in the search process as fantasy meets reality. This is a process that helps you Buy Well Today. Make sure that whoever you pick to help you find your home has a game plan that involves YOU!!!
6. PICK THE RIGHT MORTGAGE
The financial world has developed more than one way to extend you financing for your home. Depending on your place in life and your future plans, many of these plans may fit your budget and your game plan. While a 30 year fixed loan is what most people choose for their personal homes, don’t be afraid to explore other options. Financing is a big part of Buying Well Today. Your agent should have some expertise in the financing field. Don’t be afraid to have them help you brainstorm your best alternatives.
This is the part of the process that really separates the best deals from the deals that keep you underwater in your home for years to come. Negotiation is an art form that involves many variables to make the right deal happen. If you are skilled in negotiation then you are shaking your head in agreement with what I just wrote. If you haven’t negotiated many deals in your lifetime then it is really important that your agent knows how to get you the best deal possible. There is no substitute for an agent who will represent you well.
Once a sales agreement has been reached between you and the sellers, it’s time to get down to business. A general home inspection normally is included in your contingencies as well as various other possible inspections. You should secure one very soon after signing your agreed upon sales contract. The bank will get busy on their end ordering an appraisal that passes easily because you Bought Well Today. Meanwhile your agent will help facilitate all of these details and keep you informed of the process as it is happening. Don’t be afraid to pull on your agents ear during this process. There’s a lot of details to work out. Make sure your Real Estate professional is working for you.
9. GET YOUR KEYS
Once you sign the closing agreements you will get the keys to your new house! So go ahead and move in already. You’ve just achieved one of the major tenants of the American Dream. As you congratulate yourself on a noteworthy achievement, rest assured that you have Bought Well Today. Since you Bought Well Today you are better prepared for whatever might come your way.