Buying your first home

If you are a first time home buyer, the tendency is to just start looking on popular home search websites to see what is out there. That is perfectly normal and logical as a place to begin. But once you have decided to actually begin the search for a home there are important steps that you must take.

1. The most important thing is, to first of all, meet with a mortgage broker or banker to discern just how much house you can afford and to become very clear on the costs that go into obtaining a loan and closing on a house. Once you know your price range, you will need to get a pre-approval for a mortgage from that lender.
2. Finding just the right real estate agent for you is the next very important step. This person will be your best friend for the duration of your search, the negotiating process and will be there until you close on the purchase. The process of purchasing a home can be complicated, and you need a good person on your side to navigate each step of the way.
3. You will need to become very clear on the criteria you have for the new home. You will consider many of the following: location, schools, number of bedrooms and bathrooms, garage or carport, one story or two, pool or not, new construction or older home. All of these considerations will be important while conducting the initial search.
4. As you progress into the stage where you visit the active listings, you will probably find yourself honing the list of “must-have” even further. It will become evident what your actual preferences are, beyond the initial criteria. You might find that you prefer lots of windows, a corner lot, you havethe desire to be close to work or shopping or you might decide you want a place that is “walkable” to restaurants or parks. These distinctions will ultimately determine which house you eventually purchase.

Once you have found your dream home, the next phase of the home buying process begins and that includes the offer and negotiation ultimately to go to contract. There is strategy involved in making an offer that is acceptable to the seller and it is totally dependant upon the unique situation that exists. This is one reason why you need a good agent on your side during this time.

In every offer there are contingencies. There is the financing contingency, which means that if, for some reason, the loan is not approved, the buyer can get out of the contract and the earnest deposit will be refunded. If the lender is good at his or her job, the financing contingency rarely presents a problem. Another contingency is the inspection. There is usually a 7-10 day inspection period for the home, after which the buyer has the ability to either agree to take the property as-is, ask the owner for consideration or decide not to purchase the property at all, with a return of the earnest funds.

There is another contingency that some buyers ask about and that is once based on the sale of their current home. I have never recommended this option, because sellers rarely respond well to it. There are too many variables for the seller to feel comfortable with that idea and in a highly competitive market it is absolutely a non-starter.

Once everyone has come to terms, the escrow period begins. The contract is sent to a title company or attorney for processing. If it is a cash sale, a quick close is very possible. When it comes to a sale with a mortgage the process can last up to 6 weeks.

It is important for the buyer to be very clear, when speaking with the lender, what the costs of the loan are and the closing costs. This way, the buyer will be in posession of the economic impact the purchase will have.

Call or text Carol with any questions at 216-832-3123!