1. Gather Your Downpayment
The very first step in buying your new home is to figure out your finances and start saving for your down payment.
While 20% down is ideal (to avoid any extra fees such as private mortgage insurance), many first time home buyers will qualify for 3.5% down or even 0% if you qualify for a VA or USDA loan.
Speaking to a mortgage lender early on, to decide what loan type you should save for, is necessary.
And don't worry- if you don't know any lenders, I can help pair you up with a great local one!
While 20% down is ideal (to avoid any extra fees such as private mortgage insurance), many first time home buyers will qualify for 3.5% down or even 0% if you qualify for a VA or USDA loan.
Speaking to a mortgage lender early on, to decide what loan type you should save for, is necessary.
And don't worry- if you don't know any lenders, I can help pair you up with a great local one!
2. Check Your Credit Score
A decent credit score is needed in order to purchase a home. Paying off credit cards and loans on time, will help to raise your score.
A lender will use your credit score to determine whether or not to loan you money, as well as how much money to loan and at what interest rate.
A minimum credit score for an FHA loan with 3.5% down is 580. An FHA loan with 10% down requires a credit score of 500 or higher. And/or a conventional loan, you will need 620 or higher.
A lender will use your credit score to determine whether or not to loan you money, as well as how much money to loan and at what interest rate.
A minimum credit score for an FHA loan with 3.5% down is 580. An FHA loan with 10% down requires a credit score of 500 or higher. And/or a conventional loan, you will need 620 or higher.
3. Get Pre-Approved
Before we head out to look at homes, you will want to know exactly how much of a home you can afford, or how much you want to spend on a monthly payment. All this depends on what you are approved for by the lender.
We will make sure you get pre-appoved and not just pre-qualified. A pre-approval will require you to complete a mortgage application. The lender will check all your paperwork such as your
W-2, paystubs, bank statements,
tax returns, credit score, etc..
The bank will then decide on an amount that they can loan you, and this is typically good for 90 days.
With a pre-approval, you can make an offer on a home and it shows both your real estate agent, and the home seller, that you are serious about buying a home and not wasting anyone's time.
A pre-qualification requires no paperwork to your bank, just an estimate on what you qualify for based on what verbal information you provide. You can not make an offer on a home with a pre-qualification, so make sure you get pre-approved.
We will make sure you get pre-appoved and not just pre-qualified. A pre-approval will require you to complete a mortgage application. The lender will check all your paperwork such as your
W-2, paystubs, bank statements,
tax returns, credit score, etc..
The bank will then decide on an amount that they can loan you, and this is typically good for 90 days.
With a pre-approval, you can make an offer on a home and it shows both your real estate agent, and the home seller, that you are serious about buying a home and not wasting anyone's time.
A pre-qualification requires no paperwork to your bank, just an estimate on what you qualify for based on what verbal information you provide. You can not make an offer on a home with a pre-qualification, so make sure you get pre-approved.
4. Hire A REALTOR®
Buying a house is a very exciting time and one that buyers should prepare for. Whether it’s preparing to get a mortgage, or shopping for houses, you don't want to make a mistake that could cause many future headaches.
Most houses that are being sold will have an agent representing the seller, which is frequently referred to as a listing agent or sellers agent. The listing agents main responsibility is to make sure the sellers best interests are being protected.
So how does a buyer, you, make sure their best interests are being protected? Simple, you ask me to be your buyers agent!
There are several reasons why it’s extremely important that when you’re buying a house, that you hire a buyers agent.
Since a buyers agent is looking out for a buyers' best interest, they’ll help ensure the buyers gets the best deal possible.
And the best part is.... It does not cost you anything to hire and work with me as a buyers agent!
What you say? That's right! The seller will pay me to be your agent. So why wouldn't you want to hire me as your buyers agent?!
5. Shop For A Home
Next, we will want to discuss your needs and wants in your new home. You will have some ideas of non-negotiable's but also, some wants that might need to be negotiable.
Once we nail down specifics, I will set up your wants/don't wants in an MLS search, so that homes which fit your price range and other qualifications (# bedrooms, specific neighborhoods, etc.), will be emailed to you the minute it hits the market.
When a house that you would like to see comes on the market, I will call to get more information on the property and we will schedule a showing for a time and day that fits your schedule.
We will keep track of what homes we see and I will make notes about what you liked and did not like for each one.
Fill out the form on the next page to narrow down your home must haves.
Once we nail down specifics, I will set up your wants/don't wants in an MLS search, so that homes which fit your price range and other qualifications (# bedrooms, specific neighborhoods, etc.), will be emailed to you the minute it hits the market.
When a house that you would like to see comes on the market, I will call to get more information on the property and we will schedule a showing for a time and day that fits your schedule.
We will keep track of what homes we see and I will make notes about what you liked and did not like for each one.
Fill out the form on the next page to narrow down your home must haves.
6. Make An Offer!
Once you've found "the one" (aka a home that you've fallen in love with), it's time to make an offer!
Making an offer is basically sending a proposal to the seller's agent, who presents it to the seller. If they like your terms and conditions made in the offer, they will accept it. If not, they will counter back with their own terms and conditions.
Some of the negotiable terms and conditions are typically the following:
Once an offer is accepted, it is signed and legally binding. We will make sure that your offer contains all of your requirements, as it can be very difficult to request changes later on.
Making an offer is basically sending a proposal to the seller's agent, who presents it to the seller. If they like your terms and conditions made in the offer, they will accept it. If not, they will counter back with their own terms and conditions.
Some of the negotiable terms and conditions are typically the following:
- Final price
- Complete home repairs
- Who pays and how much for a home warranty
- Any transfer fees like HOA fees
- Additional inspection requests
- Changing inspection deadline dates
- Choosing the closing date
- Buyers closing costs
- Home repairs required by the lender
Once an offer is accepted, it is signed and legally binding. We will make sure that your offer contains all of your requirements, as it can be very difficult to request changes later on.
7. Get A Home Inspection
A home inspection is very important when buying a home (and often required when using a loan to finance the purchase).
A home inspection will be done by a professional, think of it as an extra pair of eyes, who will check for anything that may be wrong with the house. Mold, leaky roof, faulty foundation, etc..
After the inspection is complete, you will get a full report on the home and any faulty findings- don't be surprised to receive a report about 40+ pages long- it's normal!
The buyer is then allowed to request that some/none/all of the repairs are to be completed by the seller, which begins more negotiations between the two parties.
A home inspection will be done by a professional, think of it as an extra pair of eyes, who will check for anything that may be wrong with the house. Mold, leaky roof, faulty foundation, etc..
After the inspection is complete, you will get a full report on the home and any faulty findings- don't be surprised to receive a report about 40+ pages long- it's normal!
The buyer is then allowed to request that some/none/all of the repairs are to be completed by the seller, which begins more negotiations between the two parties.
8. Get a Home Appraisal
A home appraisal is required if you are financing your purchase. An appraiser is a third party which is hired by the bank to verify what the worth of the home truly is.
Just because you and the seller agreed to a price, doesn't mean that the bank will. After all, the home is their collateral in case you can't make your mortgage payment!
If the home is over priced, the seller will need to come down in price, or you will have the choice to make up the difference with cash (as the buyer), or you may back out of the deal.
If the home is under priced, then congrats! You got a steal of a deal! And unfortunately, the seller will not be as thrilled as you.
An appraisal is a good thing for a buyer overall. It will keep you from falling into a bad deal and will not let you over pay.
Just because you and the seller agreed to a price, doesn't mean that the bank will. After all, the home is their collateral in case you can't make your mortgage payment!
If the home is over priced, the seller will need to come down in price, or you will have the choice to make up the difference with cash (as the buyer), or you may back out of the deal.
If the home is under priced, then congrats! You got a steal of a deal! And unfortunately, the seller will not be as thrilled as you.
An appraisal is a good thing for a buyer overall. It will keep you from falling into a bad deal and will not let you over pay.
9. Close On Your Home!
Before you get the keys on closing day, a few things will take place.
First, we will do a final walk through together. This ensures that the seller has left the home in the same condition as when all contingencies and inspections were met. Say a big storm came through and blew off a chunk of the roof, or the seller damaged a wall while moving. That's why we will complete a walkthrough before you officially close.
Next, you will finalize all payments to close escrow. These are called your closing costs. Closing costs are the fees paid to the third parties that helped facilitate the sale of the home.
Typical closing costs average about 3% of the homes selling price. This is another fee that you will be saving for. However, it is possible to ask the seller to pay some/all of your closing costs OR it might be possible to wrap them up in your loan.
We will speak with your lender before hand, on how best to cover this expense, if at all possible.
First, we will do a final walk through together. This ensures that the seller has left the home in the same condition as when all contingencies and inspections were met. Say a big storm came through and blew off a chunk of the roof, or the seller damaged a wall while moving. That's why we will complete a walkthrough before you officially close.
Next, you will finalize all payments to close escrow. These are called your closing costs. Closing costs are the fees paid to the third parties that helped facilitate the sale of the home.
Typical closing costs average about 3% of the homes selling price. This is another fee that you will be saving for. However, it is possible to ask the seller to pay some/all of your closing costs OR it might be possible to wrap them up in your loan.
We will speak with your lender before hand, on how best to cover this expense, if at all possible.
10. Move In!
Congratulations! You have just now been handed the keys to your brand new home and it is time to move in!
You are officially a homeowner and can start enjoying all the benefits of owning your own home.
You are officially a homeowner and can start enjoying all the benefits of owning your own home.
Let's Do This!
Buying a home really is as easy as that.
If you see your future as a homeowner, contact me today and we will get started TOGETHER.
When you choose to work with me as your REALTOR®, I will help guide you to becoming a
confident home buyer and lead you to making a deal on your dream home.
What are you waiting for!? Let's get started today
"Don't wait for the right opportunity. Create it." -Unknown
Sincerely,
If you see your future as a homeowner, contact me today and we will get started TOGETHER.
When you choose to work with me as your REALTOR®, I will help guide you to becoming a
confident home buyer and lead you to making a deal on your dream home.
What are you waiting for!? Let's get started today
"Don't wait for the right opportunity. Create it." -Unknown
Sincerely,
