If you are a first time home buyer than terms like PMI, title Insurance, escrow and Earnest Money are probably completely foreign to your vocabulary. Well if they are I am here to help give you the basics.
1. FINANCES - For starters you need to have (or get) your finances in order. Learn about your credit score and what it means. The higher your score the better the chance of getting a mortgage for a new home.
2. GET A REALTOR - Talk to a REALTOR - An experienced REALTOR will generally recommend a lender or two for you to speak with. How do you choose a REALTOR... ask around. Ask your family and friends if they can recommend a REALTOR to you. Do some research online. By the way, don't assume that if an agent lists a lot of homes that they are good with buyers. Search out a "Buyers Agent" who will represent you in a transaction.
3. LENDER - Contact the Lenders. Most people want to start by talking with their local bank which is fine but don't assume they have the best rates. Often larger regional or national banks can offer better rates for you. In addition programs like Rural Development Direct Loans which are offered to low and very low income families through the US department of Agriculture may be available. Come of these programs are offered with $0 down and subsidized rates as low as 1%. Ask your REALTOR about these programs.
4. LOOK AT HOMES - Most people start their search online and that is fine but get out and walk through some homes. Kick the tires as they day in the auto industry. Open doors... look in cabinets... really look at a home's details. A fresh coat of pain is great but is it covering anything? Don't be afraid to ask questions of the listing agent, the Seller and most importantly your agent. By the way don't look at homes outside your comfort zone (price range) because you will simply end up wanting something that is unattainable.
5. MAKE AN OFFER - It truly surprises me how afraid people are to make an offer. A propertly written offer will give you plenty of ways to get out of the agreement if you find problems, can't get financing or you get buyers remorse. Tell your agent your concerns and let them help address any issues.
6. GET AN INSPECTION - Once you have your finances in order and you have an accepted offer, now is the time to hire a Professional home inspector. Yes I said professional... not your cousin Bob who used to build homes. Trust me on this. It will be the best $350 you ever spent. Also do not expect the home to be flawless. It will have issues as all homes do. If it is something major (yes... major) then it is reasonable to ask the seller to fix the problem or reduce the price. Little issue can be used as a negotiation point but be prepared to take the home as is.
7. CLOSING - Generally the agents will coordinate with a title company who will act as the closing agent. They are the neutral third party who prepares the document according to the terms of the purchase agreement. They will also coordinate with your lender to get the loan documents. AT this point it is generally smooth sailing but issues can come up so done be surprise dif something does and don't panic. Most issues always get resolved.
After the closing you are officially a homeowner. With interest rates as low as they are and sellers more flexible then ever... do yourself a favor and go buy a house. It will be the best decision of your life. Feel free to call me if you are looking in the Traverse City area or visit my website at www.JulesYates.com.
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