Buying a home is a complex process but, if you plan it the right way, you can buy your dream home. Here are 8 steps that can make the home buying process manageable and help you make the best decision possible.
1. Find the Right Realtor Real estate agents are one of the most important partners you'll have while buying a home. Not only can they provide you with the best knowledge of the particular home and the neighborhood but they can also get your home at the best price. They will help guide you through the complexities of buying a home from recommending inspections to negotiating sales price. If the real estate agent is not professional, seasoned, or experienced, the end result can lose you thousands of dollars.
2. Get Prequalified for a Mortgage It's best to get prequalified for a mortgage before beginning your home search. This will enable you to get professional advice from the mortgage banker and it will also help you determine how much you can actually spend on a home. You'll need to provide your financial statements to make the lender aware of your financial status and to verify your credit. I can provide you with a list of lenders that are trusted and well-respected if you are unsure of where to start.
3. Make a Budget of How Much You Can Invest According to lenders, people should look for homes in which cost is no more than four to five times their annual income, but it's up to you to decide how much you can invest in your home. You should also make sure to have enough savings to make the down payment which is usually 20%. In some cases, you may qualify for an FHA loan which is only 3.5% down payment (the lender will have more information on this). Will you want to add hardwood floors, re-paint the home, or completely remodel the kitchen? You'll also want to think about how much you're willing to invest on these upgrades. Keep the remodeling budget in mind when deciding on what you're willing to spend on your home.
4. Do Research Prior to Buying your Home As soon as you're pre-qualified to buy a home and make a budget, you are ready to start your home search. It's wise to start reading real estate listings online to get an idea of what's on the market that is within your price range and budget. Get out and look around to find a neighborhood that suits your lifestyle. Make a list of wants and needs. You should sit down with your realtor so that you are both on the same page about what is absolutely needed, and what would be the ideal features to have such as bedroom/bathroom count. This will help narrow down your search. Once we have this information, I'll be able to send you lists of homes that are tailored to you.
5. Find a Home you Love and Make an Offer! This is the fun part! Once we narrow your search down and find a home you love, you're ready to put in an offer! Obviously, you cannot buy a house without significant bargaining. If the house you like has been on the market for quite some time, there is a good chance that you can buy the house at your desired price. On the contrary, today's market can be quite competitive so we'll need to be prepared to put your best offer forward in order to win the bid. Sometimes we may need to make offers on several properties before finally winning the bid. Try not to let this discourage you as it is a normal part of the home buying process in today's market. In the end, I am confident we'll find the exact home that is right for you.
6. Inspections After we have made the offer, you should inspect the home by hiring a professional who can throughly inspect the property on your behalf. This will give you a clear idea of how much you'll need to spend after the close of escrow to make the home suitable to live in. To save on up-front costs, I usually recommend you start with a general inspector, a termite inspector, and a sewer inspector. Based on the findings of those inspections, we can evaluate what other inspections are needed, if any at all. I have a list of trusted vendors that I have worked with in the past that I can pass along to you.
7. Coordinate the Paperwork There's a lot of paperwork involved in buying a home. When I say a lot, I mean A LOT! Your agent will coordinate with all parties involved to make sure everything is legally sound and that you're protected through each aspect of the home buying process. Most of the paperwork involved can be signed electronically from your smart phone. Step by step, I can guide you through the process and take out any guesswork there may be. The lender will make sure that the seller holds the right to sell the house you are buying and there is no fraud involved.
8. Close the Deal When it's time to sign the loan docs you will need to sign in person. You will either go to the escrow company to sign, or we can arrange a notary to come to your office or home. After loan docs are signed it may take a few days for the loan to fund. Once the loan is funded, we will receive the clear to close, and close escrow. On the day we close escrow I will get the keys form the seller and deliver them to you personally! Congratulations, you are now a home-owner!
These are 8 simplified steps so that you can be better informed on the process to help you to choose and buy your dream home. I can personally help you navigate through the process so that it's as stress free as possible.