The idea of buying a new home can be both terrifying and exciting. The fear of not being able to afford a house or being turned down for having bad credit often keeps people from owning. Did you know that a mortgage payment is often around the same price as rent? The great thing about owning your own home is that you don’t have to worry about yearly increased mortgage payments like you would with renting and you build equity in your home that you can draw on if you were to ever fall on hard times. Doesn’t that sound great?
For most people, it’s a whole new experience and they aren’t informed on the matter. They are having to learn about mortgages, escrow, equity, and other terms that can seem a bit intimidating at first. If you’re like me, you want to get as much information as possible before going through with such a costly transaction. Afterall, most people live in their homes for 5 to 7 years on average. That’s a big commitment! You want to know that you are making the right decisions on your journey of home ownership and having the facts will help light the way. I hope the information below will help ease some of your concerns.
Talk to a Lender
So you’ve made the big decision to buy a house. Great! Now what? First, it would be a good idea to talk to a lender. The lender will help you get the financing needed to make such a large purchase. They’ll get you a loan that will work best for you at a rate you’ll be able to afford. You’ll also find out how much of a house you will be able to afford and how large of a down payment you’ll need to put down. If your credit isn’t the greatest, a lender can also provide you with steps to take to improve your score. Here’s a link to find out more about possible loans you’ll get. http://jbev.kw.com/2016/11/14/loans-from-lenders/#
Find a Realtor
Find a rock and throw it into a crowd. I bet it hits a real estate agent. We are everywhere! Finding a good one is what you want to focus on though. It’s important to be able to connect with your your Realtor. There are real estate agents and then there are real estate consultants. It’d be in your best interest to find a consultant. A real estate consultant will listen to what you want and put your needs first. We want to help you find the house you fall in love with. A real estate agent will talk more than they listen so they don’t always know what you want because they haven’t stopped to ask. They tend to focus more on the clients that will give them business right now. Ask your friends and coworkers who they have worked with in the past. Interview until you find the right one who will be with you every step of the way.
Your Realtor will have access to the MLS (Multiple Listing Service). It’s this magical website that shows all of the houses people with agents are selling. Your Realtor will give you a ton of options to look through. Once you choose some that look promising, you can have your Realtor take you to view them. It’s recommended that you don’t see more than 5 houses in one day. After awhile they all begin to blur together. Snapping a few pictures and taking notes of your favorites can help keep everything straight. Once you come across a house you fall in love with, put an offer in. Even if there are a few more houses you wanted to check out. If you wait, someone else could come along and snatch it up. Just ask yourself, “How much will it hurt to lose this home?”
Make an Offer
If you haven’t already realized how awesome it is to have a real estate consultant backing you, you will at this point. Contracts are never fun to read. They are very technical and a little confusing. Your Realtor will walk you through the whole thing and answer any questions you may have. They will also help you determine what the best price to offer would be. Offering a price at or below asking price would depend on the market and other houses in that area. Don’t panic if the offer you put in first gets rejected. It happens. Put in another one. You may also receive a counteroffer from the seller. Having a Realtor by your side to explain the steps that come after is an extremely valuable tool. I suggest sending a personal letter along with the contract to the seller. Doing so will help you stand out above the rest of the competition. It forces the seller to see you as a person instead of numbers on paper.
Get an Inspection
In the contract, you and your Realtor probably put in that an inspection was needed before closing. If not, that was very bold of you and I wish you the best. Inspections are very important because sometimes there are issues with the house that you can’t always see during your first walk through. A leaky roof, mold, lead paint… An inspection will bring all of these things to light. There are times when something is found and the buyer doesn’t want to buy the house unless the seller fixes it. If the seller doesn’t want to spend the money, the buyer has the right to back out and have their earnest money returned. As the buyer, you usually have to pay for the inspection but if it keeps you from future headaches and money waste it must be worth it right?
Have the Home Appraised
An appraisal is an estimate of the homes worth. Normally a cost for the buyer that is due at closing. The lender orders the appraisal from a third party company. The listing agent doesn’t have any contact with the appraiser. An appraisal is done so that everyone involved in the transaction is clear that you are paying the fair price for the house. On occasion, appraisals come back on the low side. This doesn’t mean the sell will instantly fall apart. There are options that your Realtor and your lender can help you through.
Get Homeowner’s Insurance
When you have a mortgage you have to have your home insured. This is a good thing though. It’s like having your car insured. You hate paying for it but if someone totals your car, you’re covered. If there’s a fire, a robbery, hail, or some other misfortune you will be covered against most. It’s better to have it and not use, then to need it and not have it.
Do a Final Walk Through
This is a very important step. Taking the time to thoroughly go through the property one last time before closing just to make sure everything is in order and no new issues have occurred can really help ease any anxieties you may be feeling. This way you know for sure everything is working correctly and any issues that were brought to light from the inspection have been resolved. Double check to make sure any appliances that were supposed to stay with the house are still there. After closing, the seller is no longer responsible for fixing anything so this step should never be skipped. Having a checklist with you can make things a little easier.
The end is finally here. There will be more papers that require your signature. Now would be the time to pay your closing cost, such as inspection, insurance, and appraisal fees. Title is now transferred. Loans are recorded in public records. Congratulations! You are now homeowners!