Special offer

Four Steps Towards Purchasing Your New Home

By
Real Estate Agent with Michael Saunders & Company
Four Steps Towards Purchasing Your New Home

Step 1:  The Search - Find a Realtor & Search for a Home

Step 2:  Making the Offer

Step 3:  The Closing

Step 4:  Moving In


Step 1 - The Search

A. Find a Realtor
Buying a home is certainly one of the most rewarding experiences most of us ever have; it's also one of the most challenging. If you're buying for the first time, the process may seem overwhelming. And even if you've been through it several times, every move is different and presents new challenges.
One clear advantage of enlisting the help of a sales' professional is simply that you don't have to go through it alone. A good sales professional has the background and skills to help you through each step of the process, and make the experience of finding, buying and moving into your new home as smooth, quick and enjoyable as it can be. Another advantage is that a sales professional represents a valuable source of information about market trends, communities and neighborhoods, and especially homes for sale throughout the area.
Remember, not every home seller runs an ad in the local paper or puts a sign up in the yard. In fact, many homes actually sell before there is ever a need to advertise them. The market expertise a sales professional offers your is augmented by access to complete, regularly updated information about every home listed by area sales professionals through the Multiple Listing Service (MLS).
While there's certainly no shortage of qualified sales professionals to choose from, it's important that you find one who can fully understand your wants, needs and individual tastes, and whose personal and professional judgment you respect.
B. Look for A Home
The first thing you should do is to begin focusing on what you're looking for in a home. You can start by establishing priorities in the following three areas:
Location: Are you relocating to a new town because of a new job or to be closer to your current job? How will the location of schools, shops, and transportation affect your choice of neighborhood?
Good city services, nice parks and playground facilities, convenient shopping and transportation, a track record of sound development and good planning - these are just a few considerations that are important to many people when they choose a community in which to live.
As for individual neighborhoods within a village or city, there is no better source of information than you real estate professional. Sales professionals know the people and the communities they serve, and chances are they can help you find a neighborhood that really fits your family's needs.
Personal Tastes: How large of a home do you need? What style of architecture do you prefer? What type of lot do you prefer? Depending on where you move to, you may have a choice of homes in dozens or styles, sizes, and settings.
Budget: How much home can you comfortably afford?
As you consider these issues, do a little research of your own. Look through magazines for ideas about home styles and features. Drive through neighborhoods that appeal to you to see what's available. Read the real estate listings in the newspaper to learn about current prices in the areas you're considering. Talk to friends about the features that you'd really like to have in your home. The more knowledgeable you become, the better your final decision is likely to be.
Tell the sales professional everything you like and don't like about each home you see. Don't be shy about discussing a home's shortcomings. Is the home too small for your needs? Let the sales professional know. Was the home perfect except for the carpeting? Let the sales professional know.
There is no set number of homes you should look at before you decide to make an offer on one. That's why providing the sales professional with as many details as possible up front is so helpful. The perfect home may be waiting for you on your first visit. Even if it isn't, the house-hunting process will help you get a feeling for the homes in the community and narrow your choices to a few homes that are worth a second look.
Then sit down and consider carefully all the thing you're looking for in a home.
(Back to TOP)

Step 2 - The Offer
A. Making an Offer
When you've found a special house you want to call home, you'll probably feel excited and a bit nervous. Let the sales professional know you're ready to write an "offer to purchase" - a written document that declares how much you are willing to pay for the home provided that certain conditions are met.
After you've looked at the home's features, asked question, checked comparables, and talked about it with your sales professional, you should have a good idea of what the home's value is in the current market. Consider what you can afford, and make an offer that you consider to be fair.
When you sign an offer to purchase, your sales professional will ask you for "earnest money." This refers to a monetary commitment that shows you are serious about wanting to buy. Usually, you will be asked to write a check for one to 10 percent of the sale price.
This money will be held in a special escrow account. If your offer is accepted, your earnest money will be included as part of your down payment. If your offer is not accepted, you'll get back all your earnest money.
Most buyers and sellers negotiate on price, with both sides "giving" a little until both agree. At that point, you typically will begin the process of arranging for an inspection and applying for a mortgage.
B. How Much To Offer
We've found that affordability is probably the single biggest concern of today's first-time home buyers. Given the wide range of media coverage regularly devoted to the issue, it's not surprising that many young families wonder how long it will take them to afford their first home.
Our advice: Don't sell yourself short. Talk to your real estate professional. A good sales professional is committed to honestly and responsibly working with you to determine your affordable price range. There are many financing options available today, and some include low down payments. Your sales professional will help you find an option that fits your budget, and you may be surprised at just how much home you can afford.
Simply put, a mortgage is a loan that a homebuyer obtains directly from a lender to purchase a real estate. The mortgage is a lien on the property that secures a promissory note (promise to repay the debt) that states the terms of the loan, including the interest rate and the number of payments.
A pre-qualification consists of a discussion between you and a loan officer. The loan officer will collect information regarding your income, monthly debts, credit history and assets, and based on this information calculate an estimated mortgage amount for which you qualify. The pre-qualification is not a mortgage approval, but more an estimate of what you can afford.
A pre-approval, on the other hand, is a more comprehensive approach giving an actual decision on a home loan. With ERA Mortgage, a credit report is ordered electronically and is received within 30-60 seconds. This is an actual credit approval, and it carries with it some considerable benefits. From this information, a loan approval is given agreeing to finance a home and specifying the total mortgage amount available to you.
What could be more comforting than the peace of mind that goes with knowing that your mortgage is fully approved?
You will have a greatly improved negotiating position when you are pre-approved for a mortgage. Sellers are more apt to negotiate with someone who already ahs a mortgage approval in hand. The pre-approval letter lets the seller know they are working with a serious cash buyer. A pre-approved buyer can also close on a property more quickly - another major consideration for a motivated seller. We strongly recommend it.
When you apply for a mortgage you will need to furnish information regarding your income, expenses and obligations. It will be very helpful, and save time, if you have the following items available:
Two most recent pay stubs from your employer
· W-2s for the last two years
· Last two months' bank statements
· Long-term debt information (credit cards, child support, auto loans, installment debt, etc.)
(Back to TOP)

Step 3 - Closing
A. Before you close
Your sales professional can help you with many of these considerations:
· Are all the necessary inspections complete?
· Are all the required repairs complete?
· When will you conduct your final walk-through inspection?
· Is your attorney satisfied that title to the property is clear (no one else has a claim on it)?
· Have you confirmed a date, time, and place for your closing?
· Who will conduct the closing?
· Is your insurance policy paid and ready to go into effect the day your close? You'll need a receipt for proof.
· What form of check should you use (and who should it be made out to) to pay for the closing costs?
· Has your closing sales professional told you the closing amount?
· Do you have receipts for the items you have already paid for, including your deposit and inspection fees?
· Bring your checkbook to cover last minute extras that might have been overlooked.
In most cases, you'll be given the opportunity to inspect the home immediately prior to closing. At this time, it's important to check on any work the seller agreed to have done in response to your initial inspection. You should also carefully check the condition of walls and ceilings from which window treatments, pictures, or any other attached furnishings have been removed. If you find any problems, don't hesitate to bring them up at the closing. It's the seller's responsibility to correct them.
B. Closing Day
What will happen on closing day?
The lenders agent will ask for your paid home insurance policy.
The agent will list the adjustments. These include the money you owe the seller (the remainder of the down payment; prepaid taxes) and what the seller owes you (unpaid taxes; prepaid rent).
You will sign the mortgage. This gives the lender legal rights to the property if you don't make your payments.
You will sign the mortgage note (the promise to repay the loan in regular monthly payments).
You will get title from the seller in the form of a signed deed.
The lender's agent will collect the closing costs from you and give you a settlement statement of all the items you have paid for.
The deed and mortgage will be recorded in the town or county Registry of Deeds.
(Back to TOP)

Step 4 - Move In
The first thing you'll want to do is have the locks changed. Also, put your deed and other important paperwork from the closing in a secure place, preferably a safe deposit box. Even though it's all on file with the county, it's smart to know where your copies are and have access to them at all times.
In almost every case, you can save yourself time and energy by using a reputable moving company to help you move.
Ask your sales professional, friends, and co-workers for recommendations, and then get estimates from several companies. Don't choose a mover based on price alone - consider the reputation and professionalism of the company, too.
Work closely with the moving company to coordinate your efforts, and your move will be achieved with maximum efficiency.
Most sales professionals are more than willing to offer advice and assistance to new homeowners; all you have to do is ask.
Enjoy your new home & neighborhood!
(Back to TOP)

Comments (1)

Provadus Home Loans
Provadus Home Loans - Marietta, GA
Technology bringing you home.
Great post!  You make sound very simple & easy.  I am sure a lot of home buyers will appreciate the layman's terms. 
Apr 29, 2007 08:03 AM