There are many steps and hurdles to consider when buying a home, and with the help of your real estate agent the process will be efficient and exciting, and the end result worth the wait. Here is a glimpse as to what you can expect when purchasing your next home:
Step 1: Know Your Finances
Getting your finances in order is required before your financial information can be collected. Your credit reports are an ongoing look at your financial responsibilities and debt. They play an important role in the mortgage approval process and in determining the interest rate and other loan programs that a lender offers you, so knowing your credit scores is very important in the home buying process. If you haven’t looked at your credit reports, you might be surprised at their contents, because errors are common.
Step 2: Introduce Yourself to the Mortgage Industry
Finding the right loan and lender is imperative to your home buying success. Because there are so many loan programs offered, it is critical that you be upfront and honest about your financial situation. A few of the loan programs offered are:
- Fixed rate mortgages
- FHA mortgages
- VA mortgages
- Interest only mortgages
- Adjustable rate mortgages (ARM)
- Mortgage buy-downs
- Reverse mortgages
Step 3: Find a Lender and Get Pre-Approved
You will need to be pre-approved by the lender of your choice before you will know how much you can afford. A pre-approval letter is often required when submitting an offer. A pre-approval letter simply states that your lender has pre-approved you for a mortgage within the price offered. The letter will make the seller feel more confident in your ability to purchase their home.
Questions to ask your lender:
- Will it be beneficial to repair my credit report before buying?
- Are there any state or federal programs that I may qualify for and will they benefit my loan?
- What can I expect during the loan process?
- Do I qualify for a first-time buyer programs?
- How long will this process take?
- What financial information and documentation is needed?
Step 4: Determine Your Needs vs. Wants
Determining your needs vs. your wants is critical in the process of buying a home. A good way to do this is writing down your top needs and your top 10 wants. Needs are things that you require the home to have. Wants are those things that would be a bonus for the home to have, but you could possibly do without. Often times to stay within one’s budget you must be willing to let go of some wants. A buyer may become confused and frustrated because they have not clarified their wants vs. needs.
Step 5: Choose to Work With a Real Estate Agent
Real estate agents specialize in the selling and purchasing of real estate. They will help in nearly every aspect of the home buying or selling process. Choosing an agent you feel comfortable with and confident in is one of the most critical steps in the home buying process.
Step 6: Start Searching for a Home
Upon meeting with your agent he/she will provide you with a list of properties that fit your criteria. By this point you have probably already searched the internet and skimmed through home sale magazines. Because you have chosen to work with an agent you now have the best resource in town! Here’s how your agent can help:
- Help you clarify your goals, wants, and needs
- Find homes that fit your criteria
- Get familiar with the area you choose to live in
- Keep you updated daily on homes for sale that fit your criteria (ask your agent to help you with this)
- Go look at property!
Step 7: Find the Home of Your Dreams and Make an Offer!
Your agent will walk you through all aspects of the offer, helping you to determine the terms and conditions of the purchase. At this time be sure to ask any questions, make comments, or express concerns you may have – it’s a big decision, and you should be comfortable making it.
Step 8: Home and Other Important Inspections
It is in your best interest to get a home inspection. There are several different inspections and tests that a buyer can ask to have completed. Ask your agent about what inspections he/she recommends for your purchase. A home inspection will help to determine the condition of the home. Once the report is done, the buyer and seller must come to an agreement upon what repairs must be done before the close of the sale. Your real estate agent will help you to negotiate these terms. Home inspections and various other tests are considered a contingency and must be removed before the closing of the sale.
Step 9: Prepare for Closing
Once all contingencies are removed and the closing date nears, everyone involved in your real estate transaction should check its progress on a daily basis. Staying on top of things means you’ll know immediately if there’s a problem that must be dealt with. At this time you should also be making arrangements with your movers, transfer of utilities, change of address with the postal service, and all personal vendors.
Step 10: Closing
You are nearly on your way to home ownership! You will meet with your real estate agent and sometimes your lender at title and sign all pertinent documentation. Your loan packet determines the amount of papers you need to sign. Once all paperwork is signed and money collected (if this applies), the loan package will go to docs for the final processing. It is important to remember that the day you sign is NOT the day you close. Some lenders require a 24 to 72 hour review period before funds can be released and the title company can record the deed. Once the title company records the transaction with the city or county, they will call your agent and inform them the transaction is closed. At that time your agent will make arrangements for you to collect the keys to your new home.
Step 11: Assistance After the Sale
Your real estate agent will not only help you through the sale of your home, but will continue to be a referral source after the close of escrow. Because of experience and professional relationships, a real estate agent has the knowledge and resources to connect you with valuable professionals. For example, if you need a plumber, contractor, electrician, roofer, painter, etc., call your real estate agent. At R&R Properties of Eugene we believe that service does not have an expiration date, and are more than happy to assist you after the sale.