Are you wanting to purchase a home? Good news is this is the right time to buy! In the market, the record low interest rates are able to get more homes for less money. In the following paragraphs we will be talking about this in further detail.
When it comes to buying a house it is a very involved process. It’s normal to have questions and to want to understand the steps of buying a home. It is the most expensive purchase of our lives, but the great news is you don’t have to feel overwhelmed!
Why is that? Because the Platinum Mark Team with Realty One Group Arete is ready to make this the easiest transition for our clients. We have designed this Home Buying Checklist to designate the steps in the process of buying your home!
- Find A Real Estate Agent You Can Trust
This might seem premature, but we assure you, it's not. Finding people you can trust to make sure a job gets done is huge. Before you even start looking at homes, you should find a Real Estate Agent to help assist you. In today’s housing market, it is vital having a real estate agent. They know how to negotiate, write contracts, and most importantly have your best interest to get you into your dream home.
- Get a Mortgage Pre-Approval
After selecting a trusted Realtor®, this is the second most important step. With the way the market is right now homes are only on the market for 3 – 4 days. It is imperative that you have your financing prepared and ready to go. When submitting an offer it is protocol that your Realtor® puts your pre-approval letter in with the offer they will be submitting for you. Without doing this, it could possibly cost you losing the home or simply not getting an offer accepted. If you don’t have a mortgage loan officer or need questions answered. Please contact us and we would love to recommend you to our preferred lenders.
- Determine How Much You Are Wanting To Spend
The best way to start your home buying process is to determine how much you can afford in a home. This progression can already become complex enough. Who wants to find a home and fall in love with it just to realize it’s unattainable?
By identifying a realistic budget, you can embark to your research with a firm understanding with your budget.
You will need to meet with a Mortgage Loan Officer who will determine your debt-to-income ratio (DTI). Your DTI is your monthly expenses versus your monthly cash intake. This includes all the bills you have to pay, divided by your gross monthly income. When you consider your debts, it includes recurring bills, such as student loans, car payments, etc. Anything that you pay on a monthly basis.
Have you ever heard of being “house poor”? That means you spent so much money on your home that you don’t have the funds left over for any activities, such as eating out or traveling, or even the many expenses that will come on top of your mortgage. You’ll want to budget for the fun stuff like furniture, fresh paint, plants for your new patio, but also the not so much fun stuff that inevitable comes along with being a homeowner, such as routine maintenance and unexpected replacements like water heaters.
By building some breathing room into your budget, you’ll be able to enjoy your new home without having it become a source of financial stress.
- Save For A Down Payment
Your mortgage payment is only one piece of the puzzle. It is also important to make a sizable down payment, which will save you a good chunk of money over the life of your loan. Depending on the loan you will have to put money down to move into your home.
Here are some ideas to help save up for a down payment.
- Build a budget: It’s hard to save money when you don’t even know where it’s going. By developing a budget and tracking your outflow, it’s easy to see where you can plug the holes – perhaps by eating out less or not getting coffee every morning.
- Set up automatic savings: You’ve heard the saying “pay yourself first.” By setting up automatic savings through your bank account, it can be easier to save that money because you’ll never see it.
- Get a side gig: Whether you can tutor kids or deliver food for nearby restaurants. There’s likely something you can do to earn some extra cash to put towards that down payment.
- Find The Perfect Home For You
Well, finally we got to the good part, right? Of course, This is a matter of opinion because for some buyers this is a very overwhelming step.
That’s why it is smart to have a real estate agent and have them weigh in on situations. They often can offer advice on subjects that you might have not considered, such as whether the home is in the right school district for you or if it’s been on the market a while (and therefore might have a potentially anxious seller who’s ready to deal). Make sure to do your own looking, too, by checking out homes online and visiting them to get a better sense of your own taste and needs. The options are limitless when it comes to buying a home.
While those tactics can expose you to a wide variety of homes, your real estate agent can help you narrow your search by using results from the multiple listing service, where listings tend to be more accurate and timely.
- Make a Smart Purchase Offer
So you have found “the one”. Now we’re back to the finances and how to make a smart purchase offer. This is where your real estate agent will shine; make sure to consult with them when deciding how much to offer for a particular home. Your agent can help put a vast array of criteria into perspective.
In a slow market, homebuyers can reasonably hope for a small discount on the asking price, but in a competitive market, making an offer below asking price might lead to your offer being rejected. Remember, that your offer includes much more than just the round number of the purchase price. A purchase offer will include an earnest money deposit if the offer is accepted.
- Schedule a Home Inspection
It’s impossible to accurately judge every aspect of a home’s integrity and fitness before making an offer. This is where a home inspection comes into play.
Although you’ll bear the fee, it’s well worth it in the long run, because a home inspection will protect you from unseen cost and liabilities. For example, you will know how much longer a roof has before it needs to be replaced. The home inspection is also likely to reveal minor problems. Don’t worry, almost every inspection does, so there’s no reason to panic.
Instead you can use these issues to your advantage as a bargaining chip for negotiating. Check with your real estate agent to find out if this is appropriate, you want to be wary of nickel-and- diming a seller in a hot market.
In addition to a general home inspection, you should consider ordering “speciality” inspections, such as for radon and mold.
- Prepare For Closing
Assuming that the inspection passes muster, you’ll soon be ready to close. This is when you want to make sure your finances are in order so that they are liquid when it comes time to pay all costs due at closing. You’ll also want to avoid making any purchases or financial changes that can affect your credit score.
During this period, your lender will arrange to have an independent third-party make their own appraisal of the property. If the appraised amount is significantly lower than the agreed-upon purchase price, buyers can ask the seller to lower the price or assume some of the costs at closing.
If you’re considering renovations and improvements to your future home, seek permission from the current owners to shop around for contractors, painters, carpenters and other tradesmen who will complete the work. Not only does this sort of work take time, but it can be difficult to schedule professional workers on short notice, so you’ll appreciate the long lead time.
You’ll also want to look into homeowners insurance; while you want it anyway, you’ll likely need to show proof at the closing if your is financed with a mortgage.
- Close On Your New Home
And now the BIG DAY is here. Get ready to sign a lot of papers, but don’t worry: it will feel exciting in the end. You’ll also need to bring a lot of documentation to your home closing; your real estate agent and mortgage lender will help you with the specific list.
Let’s talk about the difference between settlement and closing. Settlement occurs when the buyers, sellers, and their agents sign the closing documents of a transaction and the closing costs are paid. Closing occurs when the loan funds are disbursed and the loan documents are recordedat the County Recorder’s Office. You will not receive the keys to your home till closing occurs which is typically 24-48 hours after settlement.
Then, the magic moment comes when everything is documented and the loan funds are disbursed when you get the keys to your new home. Congratulations! It’s time to enjoy the comfort and ambience of your new home! You’ve earned it!