How to Buy a Home

Buying a home can be a pretty intimidating process, especially if this is the first time you have ever done it. There can be so many different steps to think about, additional costs you may have not realized before and the almost impossible process of finding an affordable house that has everything you want. It can seem overwhelming. However, we are here to help! Below are some great steps to help you gather your thoughts and plan out what you need to do in order to get the best house and deal for you. If you have any concerns or questions about the steps, please do not hesitate to contact us. We will guide you through the whole process.

Step 1: Check your Credit Report & Score

This first step can determine if you are able to purchase a home at all, so this is a very important step. There is no point doing a lot of research on a house you like, only to find out later down the road you cannot even afford it. You are allowed one free copy of you credit report per year by visiting annualcreditreport.com. Credit scores range from 300-850. The higher you are; the better loan you can receive.

Step 2: Create a Budget

Creating a budget can be pretty easy and can even be done online. There are many different sites that offer mortgage calculators online that can help you. This way you can create an affordable monthly payment. When doing this, make sure not to forget costs for the down payment, closing costs, fees for attorney, appraisal and inspection, remodeling or furniture. There’s lots to consider! To get the most accurate budget, I highly recommend getting pre-qualified through a lender. I will talk more about the pre-qualification and pre-approval in the next step. You can also skip Step 1 and 2 and have your realtor and lender guide you through.

Step 3: Find the Right Lender and Realtor

In order to find someone who is right for you, it is important to shop around. Talk to a few different lenders and ask many questions. This way you can see who has answers that satisfies you and gives you confidence that they will do a good job for you. We have several lenders we often work with, so if you need a lender recommendation, please feel free to ask us. First thing to do is to get pre-qualified. Pre-qualification is based off only what you tell the lender, thus have no guarantee. If you get pre-approval, then this will give you a better, more definitive idea of how big of a loan you qualify for. It makes it even easier if you do this before you start home searching. This will make it easier when you make an offer, and also more appealing to the seller. You can start your home search after the pre-qualification. It never hurts to keep your eyes on the market. You can contact your realtor and request home search e-mails sent to you at no cost. Although sources like Zillow and Trulia are useful, they don’t always have the most accurate information.

Step 4: Look for the Right Home

The easiest thing to do, in order to narrow down your choices is to make a list. Make a list of the things you need to have in your house such as how many bedrooms or bathrooms. This will help you get an idea of what to look for when searching. It is also important to make a list for what you want in regards to neighborhoods, schools, length of commute and distance to grocery stores as well. A good realtor will be able to give you some suggestions and recommendations through this process.

Step 5: Make an offer on the Home

When making an offer, keep in mind that most sellers price their homes a bit higher than they are worth. This is because they expect some haggling to occur. An acceptable price to offer at first is around 5% below the asking price. However, once you make an offer don’t think that is it. You may need to make a counter offer. This is where a n experienced real-estate agent skills comes in handy. Once you and the seller have agreed on a price, you will have to make an earnest money deposit. This is the money that goes into escrow to give the seller a sign of good faith.

Step 6: Get the Right Mortgage for your Situation

There are many different types of mortgages to choose from, however you should know the three basics: adjustable rate, fixed rate and interest only. Adjustable rate mortgages are shot-term mortgages that offer an interest rate that is fixed for a short period of time, generally between one to seven years. After this time has passed, the interest rate can adjust up or down every year, depending on the market. This type of mortgage is more applicable to those who do not plan on living in their home for very long, or want lower interest rates and payment.

Fixed-rate mortgages are more traditional and are able to offer a fixed interest rate for a longer period of time. Time period being usually between 15-30 years. This type of mortgage is good for people that like to have a predictable payment and plan on living in their home for a long period of time. Both of these rate mortgages can have interest only payment. This means that for a certain amount of time during the loan term, you can pay only enough to cover the interest portion. The benefit to this is that you can increase your cash flow by not paying principal. Both myself and your lender can help you understand how the loans work. It can be intimidating the first time.

Step 7: Close on your Home

Before closing a home, it is imperative to get a home inspection. It is worth the money because it ensures that the property is structurally sound and in good condition. Make sure to talk with your banker to ensure you understand all the costs that are involved with the closing. That way there are no surprises. For the most part, closing costs usually include down payments, title fees, appraisal fees, attorney fees, inspection fees, and points you may have bought to buy down your interest rate. You are more than welcome to

Step 8: Move In

Now that you have completed the home buying process, all you have left to do is move in and unpack in your new home! I hope you stay in touch! I would love to hear from you again.

 

Buying a home doesn’t have to be so scary, you just have to make sure to be prepared and know what to do. Choose an experienced home loan lender and a knowledgeable real estate agent.

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How to Sell Your Home

Step 1: Prepare to Sell your House

Choosing the right and experienced realtor for selling a home is very crucial. There are several steps involved in selling a home the right way, and is very helpful to have someone to guide you. The first question you should ask yourself is if you are ready to do what it takes to sell a house. You need to make sure your house is “sell ready”, which means you must determine what needs to be cleaned, painted, repaired and tossed out. Another thing you want to make sure and do, is to improve your home’s value. This means you want to improve your home, but also make sure it fits in with the neighborhood it is located in. Improvements made on our house should make the property reflect the community’s preferences. Cosmetic and mechanical repairs should be made; this will help you get the top price you can possibly get for your home.

Step 2: Find a Relator

When choosing a realtor, you will want to make sure they are knowledgeable, friendly and local to the area. You want a realtor that knows the community and thus can sell your house to the prospects. You will want to go to a few realtors before making your final choice. Make sure to ask them all the questions you have, and then pick based off their answers. You want to make sure they can answer your questions to your criteria. This way you will feel comfortable that you are working with someone you can trust and will get the best deal for you.

Step 3: Set the List Price of your Home

When setting the price of your home, keep in mind that your home is only worth what the market will bear. If the price you set is too high, some potential buyers won’t even consider it, and others will not make an offer. Your realtor should ensure that the price you set is based on the best comparative market analysis. They should explain why the house should be set to this certain price and how it is more likely to sell your house quicker.

When choosing a price, make sure to look through the comparative market analysis. This should include sales prices for similar houses nearby that will be your competition as well as houses that were taken off the market because they did not sell. You and your realtor can estimate who may want to buy your house and what those buyers are looking for, this way you can set the best price that is most likely to get the most offers.

Step 4: Market your House for Maximum Exposure

When you list your house, it should be in prime condition. It is your job as the seller to ensure your house is pristine. It is up to you to make sure all clutter and personalization are removed, and all updates needed are done to the home. Buyers wants to be able to visualize themselves living in the house. If there is too much clutter, they are unable to do this. To them, it will seem as if the house is smaller than it actually is and you will loose a potential sale. While it is your job to do all of this, your realtor’s job is to identify potential buyers, take professional photographs of the house, list your house on multiple sources to ensure you have maximum exposure.

Step 5: Negotiate a Real Estate Offer

When negotiating a deal with a potential buyer, it is the realtor’s job to educate you on the terms of the offer and ensure you understand the housing market in your area. When an offer is made, you should first make sure the buyer can fulfill the contract with financing. This means you should check the pre-approval letter with your realtor. Next, you should evaluate the offer made to you. You should consider how close it is to your asking price, how many offers have come in, if any repair requests have been made by buyer, if buyer needs assistance with closing costs and what the largest earnest money deposit is. Next, you should either, accept, decline or make a counter offer. Make sure to discuss your best options with your realtor.

Step 6: The Art of Settling

Once an offer is made and a contract signed, this does not necessarily mean your work is over. Sometimes the buyer may request that your house has a termite inspection, radon gas inspection or other type of inspections. Before you go to settlement, you and your listing realtor should go over the contract and make sure all promises are being fulfilled. It is also very important to have a written agreement between seller and buyer to ensure that if something happens to the house in the transition period, you both know who is responsible for handling it. Next, the title of the property is transferred to the buyer and the buyer provides funds to your home.

Pre-Qualification vs. Pre-Approved

When buying a house, you want to make sure you know exactly what you are getting yourself into. There is alot of real estate lingo that most people may not know. Fear no longer, because this post will help answer some questions you may have! Many people wonder what the difference between pre-qualified and pre-approved is, and sometimes use them interchangeably, this isn’t exactly right however.

When buying a house, the first thing everyone wants to know is, can you actually afford it? The agent will definitely want to know this, because they don’t want to waste their time and your time if you cannot actually place an offer on a property you’re looking at. Because an agent and the home seller want to know that you are serious, they will request that you get pre-approved . So what is the difference?

Pre-qualification is when you want to finance your home purchase with a mortgage. This is a check that ensures that you can afford this house based off of your income/debt levels, assets, down payment, employment history, credit score etc. This can be done very quickly and can be done with a bank or a mortgage broker. This pre-qualification however does not really hold much weight in the agent’s or seller’s perspective. This is because this is for the most part, all hypothetical and is only an estimate. This is only a determination of what you would most likely qualify for if you made an offer and applied for a loan. So how do you really show an agent or seller you are serious?

A pre-approval holds much more weight and can show everyone that you are truly serious about buying a home. A pre-approval is a written, conditional commitment from a bank or mortgage lender that says you are pre-approved for the mortgage financing. In order to get pre-approved you have to fill out a loan application, verify your income, assets, employment documentation and check your credit. This process can take around an average of 60-90 days. Once this has occurred you will receive your pre-approval letter from a bank or lender.
It is important to keep in mind that a pre-approval letter is not mandatory in order to make an offer on a property, however it definitely is a plus and will help you in the long run. Having the pre-approval letter on hand and ready when it is asked from you can save you time and money, and can ensure you put in the bid for a property in a timely manner.