Friday, June 2, 2017

Road Map to Purchasing Your Own Home

After working in real estate for a while, I have realized that one of the questions I get asked most frequently is, "Can you explain a little bit more about the home buying process?" or even, "What's the next step?" More often, this is with new buyers, but I am also getting asked by clients who have purchased a home in the past as well.
The home buying process just isn't clear.
I have here this handy-dandy little road map in order to better outline the home buying process.

Step One: Find a Real Estate Agent you want to work with for the next few months. The easiest way to do this is to ask your friends and family if they know anyone or if they have a great agent they have used in the past. They probably do! 
After you have connected with your agent, work with them to make a list of everything you need in your new home: single story, 3 bedrooms, a pool, close to work, whatever your requirements are. Then make a list of wants. Your agent will work with you to find homes in your area. 

Step Two: Partner with a lender to find out how much of a loan you qualify for. You can use your bank (Chase, Wells Fargo) or any other lender you prefer. A lot of the time, you can ask your Real Estate Agent if they have a lender they use and trust. Don't be afraid of this step! Your loan officer will take all kinds of things into account- income, debt to income ratio, savings, your credit score, and many other things in order to determine the amount you qualify for. Once you have the number, you can take that back to your Real Estate Agent. They will take this into account when they do your search for homes. Maybe you can still get the single story close to work, but you can't afford the pool. Or maybe your credit score is better than you thought and you can get a pool and a 3 car garage. You just have to find out. 

Step Three: Work with your Real Estate Agent to look for homes in your area. Your agent will work diligently to make sure you see everything that comes up in your price range. You can see the homes in person with your Real Estate Agent, or just look at them online and tell them if you know you don't like them right away. You can give your agent feedback on the homes you have seen so they can narrow down your criteria even further and weed out homes you don't like. 

Step Four: Once you have found the perfect home, let your Real Estate Agent know and together you can write an offer. Your agent will help you define the "terms" you want to put into your offer, such as the purchase price of the home, your down payment and loan amount, contingency periods, and what you as the buyer will pay for (For example, do you want to offer to pay the escrow fees for the seller? Do you want to ask the seller to buy you a home warranty? These are the items your agent will discuss with you while you are writing the offer.) Usually, you will need a copy of your pre-approval letter from your lender to go with your offer as well as your proof of funds for your down payment, and, in some cases, a check written to the title company in case your offer gets accepted. 

Step Five: Your Real Estate Agent will work with the listing agent on the property to negotiate the terms of the contract. Your agent will be working with your best interest in mind to make sure you get the terms you need and want out of the contract. The listing agent will be trying to negotiate the same for the seller, so sometimes you may have to compromise if you really want the house. 

Step Six: You and the seller have agreed on all the terms of the contract, which means you now have an "executed contract" and are going to open escrow on the house. Your purchase has officially begun! Your Real Estate Agent will provide you with a timeline that outlines the contract, usually providing you with the dates you will need to know- when you need to do drop off your deposit to the title company, when you 

Step Seven: It is time to meet with your team of professionals to get started- meet with your lender again to begin the loan process and order the appraisal. Your lender will be collecting all the documents they need from you and sending your loan to their underwriting department. You can begin getting insurance quotes for the house. Meet with your Real Estate Agent to discuss what inspections you would like to do on the house. For example, you may want to do a whole house inspection, or a roof inspection, or if the house has a pool, a pool inspection. There are all sorts of things you can look into regarding the property. You need to do your due diligence to make sure this is the home you want to buy and your Real Estate Agent will take care of getting everything scheduled at your convenience. 

Step Eight: You have done your due diligence and decided you want to move forward to purchase the home. Your Real Estate Agent will meet you at the property one last time to make sure any requested repairs have been done and to make sure the property is still in the same condition as it was when you made the offer. The last step is to sign the transfer papers at the title company. Your lender will fund your loan and you will need to bring a check or wire the rest of your down payment to the title company and this will complete the purchase. The title company will send the file to the county recorder's office to record the property in your name. Once that is done and they get confirmation of recording, the property is yours!

You now own your home!

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