One of the most significant and exciting choices you will ever make is the decision to purchase your first home. So how do you know if it’s the right time? There are many factors to consider, but being decisive at the right moment can result in huge returns. Once you have determined that it’s time to buy and then moving quickly to find the right home marks a very significant moment in your life.
When done right, home ownership can help lay the foundation for a life of financial security. The most important thing to remember is that you don’t have to know everything – this is where a Golston Real Estate (GRE) agent can make the difference.
2. Hire your agent
When you’re looking for a real estate professional to help you, you need a knowledgeable and trusted advisor who will put your needs first and protect your best interests. This is your dream and a GRE agent can be an advocate and trusted partner to help make your dream come true.
The typical real estate transaction involves at least two-dozen separate individuals, and it is the responsibility of your real estate agent to effectively coordinate all the professionals involved in your home purchase. A GRE agent will:
- Educate you about the current market conditions.
- Analyze what you want and what you need in your next home.
- Guide you to homes that fit your purchase criteria.
- Coordinate the work of the other needed professionals throughout the process.
- Negotiate with the seller on your behalf.
- Check and double-check paperwork and deadlines.
- Help solve any problems that may arise.
3. Secure financing
Lenders use fairly strict guidelines & formulas to determine how much you can finance and what your monthly mortgage payment will ultimately be. These guidelines typically impact the four components of your mortgage payment; principal, interest, taxes, and homeowner’s insurance. Lenders will pre-approve you for a certain amount, but you will need to decide what you’re comfortable paying every month. You always want to leave room for those unexpected costs and “surprises”. Remember, your lender only sees your finances on paper, but you’re the one who has to live with them.
Follow these 6 steps to financing your home:
- Choose a loan officer.
- Make a loan application and get pre-approved.
- Determine an amount you’re willing to pay and select a loan option.
- Submit to the lender an accepted purchase offer contract.
- Get an appraisal and title commitment.
- Obtain funding at closing.
4. Find your home
So once you are preapproved and ready to begin your search, you may wonder how or where you begin. This is where your agent will help you create criteria for a home that not only meets your needs but also identifies those “wants” you can afford. This process will help you refine your priorities to ensure you get what’s best for you. Some questions you might ask yourself include:
- What do I want my home to be close to?
- How much space do I need and why?
- Which is more critical: location or size?
- Would I be interested in a fixer-upper?
- How important is home value appreciation?
- Is neighborhood stability a priority?
- Would I be interested in a condo?
- What features and amenities do I want? Which do I really need?
- Should I make an offer?
5. Make an offer
Once you have found a home you like, the next step is to make an offer. Your agent will research similar properties in the neighborhood to help you determine the a fair price to offer on the property. The three basic components of your purchase offer are:
- Price – Amount you are approved for or are willing and able to pay.
- Terms – Other financial and timing factors that will be included in the offer.
- Contingencies – Clauses that let you out of the deal if the property has a problem that didn’t exist or which you were not aware of when you ratified your contract; or any event that will need to take place in order for you to fulfill the contract.
Your experienced GRE agent will help you with all of these important decisions.
6. Perform due diligence
While a property you’ve chosen may appear like the “perfect” home for you, what lies beneath the surface may in fact be anything but perfect. This is where patience, due diligence and controlled excitement can be your best friends. You will need to have a property inspection that will expose any hidden issues, and it is highly recommended that you attend this home inspection as well. Your main concern is the possibility of structural damage that can come from water damage, shifting ground or poor construction when the house was built.
Don’t sweat the “small stuff”. It’s the inspector’s job to mark everything discovered, no matter how large or small. The inspector’s report may be long, but things that are easily fixed can be secondary for the time being. If a significant problem is discovered during the inspection, you should consult a specialist to determine your options. After consulting the experts and determining what it will take to remedy the situation, you must be willing to walk away from the purchase if issue is too large to overcome. Even if your home does pass inspection, you will still need to purchase a homeowner’s insurance policy to meet the requirements of your lender, provide liability protection and protect you against loss or damage to the property.
Once you’ve made your offer and performed due diligence, then you are in the “home stretch”. Following are a few pre-closing responsibilities to help ensure that you do not put your closing date or your mortgage financing at risk.
- Stay in control of your credit and finances, first and foremost. Avoid any large discretionary purchases if possible until after closing.
- Communicate with your agent at least once or twice a week and verify with your lender that all mortgage-funding steps are completed.
- Return all phone calls and requests for paperwork from your lender promptly.
- If possible, conduct a final walk-through of the home with your agent.
- Finally, be sure to confirm with your agent, lender and home insurance professional that you have the settlement statement, certified funds, and evidence of insurance lined up prior to closing.
8. Protect your home
Congratulations and welcome home! The home buying process is complete, but now you will need to protect your investment for years to come. You can do so by performing routine maintenance on your home’s systems. Be sure to watch for signs of leaks, damage, and wear.
Remember, just because the sale is complete, the relationship with your GRE agent doesn’t need to end. After closing, your agent can still help you – providing information for your tax returns, finding contractors and repair services, and even tracking your home’s current market value.
At Golston Real Estate, we are looking for life-long relationships, and the purchase of your home may be just the beginning.