Buyer Series: Let’s Buy a House
Buying a house can be a thrilling and rewarding endeavor, but can also be overwhelming if you don’t know where to start. This quick intro to buying a house will help you prepare for your journey and walk you through the steps of buying your next home. So get your notebook ready and let’s get started!
Get Pre-Approved & Set a Budget
Before diving into the house-hunting process, you’ll want to get your finances in order. This means finding out your credit score and applying for a loan with multiple lenders to ensure you’re getting the best deal. Getting pre-approved tells you how much you can afford to borrow.
Take note: Many realtors will not work with clients that haven’t been pre-approved.
Depending on your chosen lender, you’ll likely need to provide a lot of documentation to give them a good idea of your financial situation. Be prepared to provide income statements, bank statements, tax documents, and other documents showing how much money is coming in and going out.
Once you know how much you can afford to borrow, make sure that you understand that your mortgage monthly payment not only includes the loan principal and interest. It can also include property taxes, mortgage insurance, and homeowners insurance. These can add anywhere from a couple of hundred dollars to over $1,000 per month to your mortgage payment, depending on where you live.
Keep in mind there are also various costs and fees that you’ll pay when buying a house, such as earnest money and fees for a home inspection fee, appraisal and title search. When you are budgeting for a new house, always remember to factor in additional costs along the way.
Hire the Perfect Realtor
Finding the perfect realtor is key to finding your dream home. You need someone who will listen to your wish list, respect your concerns, and be committed to you and your real estate journey. Just like applying to multiple lenders, it’s a good idea to interview several realtors to find one that is a good fit for you.
Do You Really Need a Real Estate Agent? Yes, and Here’s Why
Realtors can take care of the technical side of things and ensure the contracts are in your best interest. They can also take over negotiations to get you the best deal on things like closing costs, repairs, and appliances.
Some may attempt to go down this road on their own for many reasons, but in the end, the advantages of having a professional agent in your corner outweigh the disadvantages.
Find Your Perfect Home
Now the fun begins! Start your search to find your perfect home. Drive through neighborhoods to get an idea of where you want to live. Think about what you want in your next home. How many bedrooms do you need? Does someone in the family love to cook and a gourmet kitchen is a desire?
Consider these things in your search:
Location - this can include neighborhoods and proximity to schools, shopping, and your office
Price of the property - be sure to stay within your budget
Size and floor plan of the property - open-concept vs traditional floor plan and any accessibility issues like stairs
Number of bedrooms and bathrooms - know how many you have to have vs how many you want
Move-in-ready or fixer-upper - know your limitations when buying a fixer-upper
Once you have an idea of where you want to live and what you want and need in your next home, search the online listings. Work with your realtor to put together a list of houses you want to tour. As you tour these houses, take pictures and notes of the houses you like so you can remember which house is which when you get home. This will help you decide which one you want to make an offer on.
Make an Offer
Your realtor will assist you in preparing and submitting an offer to the seller. The offer includes the proposed purchasing price, contingencies that will allow you to back out of the contract, and the closing date. Always make your strongest offer in case there are competing offers for the property. Your realtor will help you understand whether it’s a seller’s or buyer’s market and how this can affect the power of your offer.
The seller can accept or reject your offer or make a counteroffer. If the seller counteroffers, your realtor will help you with negotiations. But remember, the decisions are yours to make.
If your offer is accepted and all parties have signed the contract, you are under contract.
Schedule Inspections and Appraisal
An appraisal is an unbiased professional opinion of the value of the home. If you are acquiring financing to purchase the property, your lender will require an appraisal. This lets the lender know that they are not lending more than the property’s worth.
As a buyer, you should get a structural and mechanical inspection on the property.Because it points out all of the necessary repairs, you don’t want to skip this one. A few other inspections you can purchase are for septic systems, mold, lead-based paint for homes built before 1978, and to check for wood destroying pests.
Your inspection company will send you a report that discusses any problems. If you want the seller to remedy any repairs, you’ll have to negotiate with the seller to amend the contract. Although many “problems” may be presented on an inspection, be mindful of the age and condition of the property.
Finalizing the Paperwork
Stay in touch with your lender and make sure you have completed everything they have asked of you. All of the paperwork must be finished in a timely manner. Time is of the essence!!
Don’t be afraid to…give your lending agent a call if you haven’t had an update in a few days. No news isn’t always good news with contracts.
Closing Date
Three days before your closing date, you will receive the Closing Disclosure. Review it to ensure that everything is correct, your loan terms, projected monthly mortgage payment, and the amount you will need to pay for closing costs.
The day before closing, do a final walkthrough of the property to make sure anything that needed to be repaired is completed and that the house is still in as good of condition as when you first saw it. On the day of your closing appointment, loosen up your wrist and get ready to sign all the necessary paperwork and pay the closing costs.
Once everyone has signed the paperwork and the transaction has been funded, you will receive the keys to your new home!
Congratulations are always in order to anyone who has survived a home buying process! It’s not easy but at the end of the day, you are rewarded with a place to call home.
If you have any questions or are looking to buy or sell your home in the Dallas/Fort Worth area, be sure and give me a call. I would love the opportunity to work with you! ~Cari