9 Steps To Take Before Buying Your First Home
Buying your first home is one of the most exhilarating experiences a person can have! A recent study showed that most renters didn't even know that they could buy! So maybe you’re tired of throwing away money every month on rent and are finally ready to pull the trigger and purchase your first home. You probably have some questions. I’m here to tell you everything you need to know.
Wants vs. Needs
As a real estate agent one of the first questions I will ask you is what do you want in your first home? Identifying your wants from your needs is an important first step when starting your search. For instance, you have a family of 4. Bedrooms become an essential need whereas 5 acres of land may become less important. It’s crucial that you make a list of features and amenities that you would like to have in your first home. Prioritize this list starting with the essential (need) first and work your way down to the aspects that would be nice to have (want).
Home Buying Process
Buying a home isn’t something you do every day, so you might not know what to expect. Most buyers don’t. My goal as an agent is to make sure you take each step with confidence.
Identify who your real estate agent and mortgage broker are.
Get a pre-approval letter, most sellers will not even consider an offer without a pre-approval letter from your lender, know your budget and terms.
Go house-hunting, have your agent send you a list of properties within your criteria and together determine which houses you should see.
Making an offer, this is the negotiation stage where you will agree upon price and terms with the sellers.
Once you have an accepted offer you will enter into the contract period, where you will show your willingness to buy by giving the seller’s an earnest money check that is typically 1% of the sales price. You will receive this money back after closing.
Next is the home inspection, this will ensure that your desired home is in strong enough condition to buy. This is your last chance to back out of purchasing a home without losing your earnest money.
Receive an appraisal and obtain final loan approval from your lender. A home appraisal is an unbiased estimate of the true (or fair market) value of what a home is worth. All lenders order an appraisal during the mortgage loan process so that there is an objective way to assess the home's market value and ensure that the amount of money requested by the borrower is appropriate.
Review all information and remove contingencies, if satisfied.
Now for the final step, CLOSE ON YOUR HOME! Congratulations, you did it.
As you can see, buying a home is really a series of small decisions. As long as you continue to find the information you receive acceptable, you will move through the process towards the close. If not... you will cancel and start over with another property. Buying a home is exciting and understanding the process can help you avoid unnecessary stress.
Still on the fence of if you should rent or buy? Check out the info-graphic below and contact us if you have any questions!