1) Get a Job (or have enough cash to pay in full then you may skip to step 4). Believe it or not I have people who call and want to buy a house with no cash flow.
2) Create a monthly budget of all your income/s and expenses and figure out how much you currently could afford to spend on a mortgage per month.
3) Meet with your Mortgage Lender that someone recommended or that you know personally. They will then help you get your assets and liabilities figured out and will help you figure out what mortgage amount you qualify for. They can even help you figure out what your monthly payments will be to ensure you know what your monthly mortgage amount will be. This is crucial to ensure that your monthly payments fit into your previously computed budget.
4) Once you know what you can spend contact a full-time Realtor who works with buyers on a daily basis. Ensure that this is their primary job and not an "extra money-maker" or "hobby" or you may find your self not getting the best possible price for your new home. Remember the money you pay for your home is that amount you are tied to every month until it is paid off or re-mortgaged, a few thousands of dollars does make a difference especially when it comes time to sell the house. Crucial tip - do not look at homes and call listing agents for each house or go to open house without your own agent representing you. If you do any information that you give to the Listing agent (the agent that is representing the seller) they will share with the seller and use it against you in negotiations. You want one agent to represent your best interests.
5) Maintain good communication with your Realtor. Treat them as you would any other professional. Schedule time to look at property and let them know if your schedule changes or emergencies come up. Understand that they are coordinating these appointments which the other agents and the seller and their families. If you can't get a hold of your agent and you really want to see a property leave them a message and contact the real estate agency they work for they will find someone to show you the property with good representation. DO NOT call the Lisitng Agent for the same reasons described in step 4.
6) Make and Offer. The natural outcome of finding a house that you can afford and that you like is to create an offer. In real estate everything, but taxes, are negotiable. Negotiations can be fun but don't make lowball offers if you don't have a back up house or two. I have seen many people get the sellers to come down and the buyer wants to get them to come down more and another offer is given to the seller and they accept the higher offer and now the buyer is devastated because they really wanted that home. Your Realtor should give you an idea of what to offer and use comparable homes that have sold like the home you want to determine the offer price.
7) Offer is accepted. When the offer is accepted keep your shirt on nothing is final until all contingencies(inspections, appraisals,etc.) are removed. Stay vigilant and continue the communication with your Realtor. Things may need to get resigned and they must be done in a timely fashion to ensure you close on your home in time. Your agent will do all the coordination and leg work, you just have to be ready to communicate with them, sometime on short notice. If you are going to be out of cellphone range or out of the country tell your agent and set up a couple of contingency plans ahead of time. At this point don't do anything that will affect your credit. I had a client that got so excited that after the offer was accepted they bought all new appliances, big screen tv, bed and furniture for the house on a credit card. This changed their credit score quite a bit and he had to return it all to buy the house.
8) Closing on the home. If you have not received the HUD 1 statement the day before closing or earlier ask your Realtor to get you a copy. This statement will give you exactly what you are paying at closing and where all the money is going in a line by line fashion. You will get the choice if you want Title Insurance on the property. I recommend it because for the cost of it is less than one trip to court to fight any lein, covenant, easement that was not found on the title search.
9) After the Closing. Make sure you contact the city/county about your property taxes. If you purchased a home for less that the tax assessed value you can usually get them to reduce the payments if you bring in the purchase agreement. Understand they may reassess the next year and your taxes may go back up, but I recommend it the savings are worth the effort. Keep all your closing documents in a fireproof/waterproof safe, you will need the abstract/Torrens for sure and maybe some of the other documents too. I allow all my clients an online vault where they can access their documents in a secured location that is backed up.
Understand that these are just the basics. If there are questions you may have feel free to contact me at Dan@TheRealEstateRanger.com or call/text me at 507-990-1721 or check out my website at www.TheRealEstateRanger.com .
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