CONGRATULATIONS! You want to buy a house. The idea of homeownership is one of the most important decisions you can make in your life. Whether you want a fixer-upper or a turn key home, you gotta start somewhere right?
So let’s jump right in. Here are a few steps you should follow on your path to homeownership:
Step 1: Figure Out Financing
There is no worse feeling in the homebuying process than starting to look at homes before you know how much you can afford. It can set unrealistic expectations at times. That’s why knowing what’s what financially is so important. Speaking to a lender is the first step to the process. They will be able to give you (with a pre-approval of course) an idea of where your limits are. Be prepared to submit financial information, debts and expenses (often more than once).Talk to a lender before you hire a real estate agent.
Step 2: Find a Reliable Agent
Ask your friends and family if they can recommend an agent who will go above and beyond to find your dream home. Get an agent who works for you. The right agent will be your advocate to make this process as smooth and painless as possible. If your in the Hampton Roads area….I can definitely assist you on that one (Hire me). Like I said earlier, you should talk to a lender before you hire a real estate agent, but a lot of agents have the inside scoop to good local lenders they can refer you to.
Step 3: Be Respectful of your Budget when Setting your Expectations
Okay Okay ….. I’m not trying to kill anyone’s dreams here. Unfortunately, when house shopping you have to be realistic. Decide what are wants and needs in potential homes (How many bedrooms? Bathrooms? Size? Location? etc).
First-time buyers should prepare themselves for disappointment at some point in the process, though this is not the always the case. When looking for a home, it is important to keep short and long-term goals in mind . Remember- there is a lot that goes into buying a first home. Compromise is very important.
Step 4: Put in an offer
Good job selecting a house! The battle isn’t nearly over at this point though. Getting the house and putting in an offer on one are two COMPLETELY different things.
It’s a frenzy in the market at moment. Inventory is at historical lows, which means if your looking to buy this house- it’s a good chance your offer will be competing with several others.
There are different things that the sellers will make their decision on when looking at offers with their agent. Some of those factors are:
- Your actual offer on the purchase price
- How much of the closing costs you would like the seller to pay
- Closing date
- Amount of earnest money your putting down
- Inspection (whether you want one or not)
- Any other contingencies you asked for in the offer
What does this mean for you? Well…I hope you took heed to step 2 and found an agent who will guide you into crafting a competitive offer. Are you a shark or prey ?
Step 5:Offer Acceptance/Counter/Denial
This step is pretty self explanatory… but I got you anyway lol …If your offer is accepted: Congrats, but your not done yet ..move to step 6
If the seller for whatever reason decides to select a competing offer…Don’t be discouraged, what’s meant for you is meant for you… get back out there and find your dream home.
The seller may,however, counter your offer. What Is a counter offer you say? Home sellers make counteroffers when they’re dissatisfied with a buyer’s initial bid. Usually, a counteroffer states that the seller has accepted the buyer’s offer subject to one or more changes. In this case you decide with your agent if the counteroffers terms work for you. If they do… great. If not … you can either counter or walk away.
Once everyone comes to a meeting of the minds, the accepted offer becomes ratified. Now it’s time to get information on your future home.
You DEFINITELY want to get an inspection, and your going to be responsible for covering the cost of it. A home inspection is a limited examination of the condition of a home. Home inspections are usually conducted by a home inspector who has the training and certifications to perform such inspections. They will write up a report to let you know the good,bad, and ugly aspects of your home.
Once the inspection is done all parties agree what will (and won’t ) be fixed, an appraisal is ordered. A Real estate appraisal unbiased professional opinion of value, for real property. The borrower usually pays the appraisal fee, which can be several hundred dollars. Real estate transactions require appraisals because every property is unique.
The goal here is for the house appraisal to be at least (or higher) than the offered price of the property. Generally speaking, banks don’t want to issue loans for properties that don’t appraise at the value of the loan…. When the appraisal value is lower than expected, the transaction can be delayed or even canceled.
Step 7:Final Walkthrough & Closing
Inspection? Check. Appraisal good? Check. All roads point to close!!!! It’s time to do your final walkthrough. During this walkthrough your making sure what you asked to be corrected from the inspection have been done. This is also the time to simply see if the home is in the same condition as the last time you saw it. If necessary order a Re-inspection for your final walkthrough day. If everything is to your liking …See you at the closing table!
On closing day,you will sign all of the documents needed to deed the property to you and sign your mortgage paperwork. All down payments and/or closing costs will be due at this time. Not too shabby.
Final Step: YOU MADE IT!!!!
Welcome to the wonderful (and challenging) world of homeownership. You have finished the long but rewarding process. Who would have thought, start to finish this took you 30-45 days !!! Give yourself a pat on the back. Good Job!