The Insider’s Guide to Buying a Home- The Complete Step-by-Step Process
Buying a home is a tremendous accomplishment in your life. Whether this is your first time or you are a home buying veteran, it is important to have a plan and stay on track. While some transactions are not as smooth as others, this simple step by step process will definitely guide you through with ease.
Step 1: Do Your Research
When you finally make the decision to buy a home, research is a vital first step in the process. Some valuable elements to inquire about are as follows: your neighborhood amenities such as, schools, parks, proximity to local shops and public transportation. Also, take a look at your community as well. Do you want to live in a busy, loud neighborhood or step back from it all in a quiet, more laid back area.
Another thing to consider researching is the type of home you want to buy. For example, thinking about buying a foreclosure or a fixer upper? Before you dive right in, it is best to research a bit and find out if it is the right fit for you.
Step 2: Take a Look at Your Credit Score
As is it always important to be aware of what type of shape your credit is in, it is extremely important when it comes to buying a home. When you sit down with your mortgage lender, one of the first things they will do is check your credit score and credit history. Simply put, the better your credit score, the better interest rate and financing you will get when buying a home.
If you have a “not so hot” credit score (or maybe no credit at all) it very important to do your best to raise your credit score in any way you can. Not sure what your credit score is or how to check? Websites such as, CreditKarma.com and Experian.com are free tools you can utilize. Tip: Most banks now offer FREE credit checks with your online banking!
Step 3: Hire a Local Real Estate Agent
Probably one of the most important steps in a real estate transaction is having the right person to represent you. Hiring a local realtor, who lives in and knows the area is key. They will know the ins and outs of everything pertaining to your desired neighborhood. Having a realtor represent you will not only make the whole entire process of buying a home a breeze, but can save you money as well! Agents are there for you when it comes to negotiating the best deal, offering the best advice and keeping everything on track and professional.
Unsure of where to start? Contact the LBI Duplex team here.
Step 4: Get Pre-Approved
Another important step is to get pre-approved by a local mortgage lender. When you hire local, you will get a lender who will know your area and has experience dealing with the home buying process in the area. A pre-approval will ensure you are able to afford the house you are looking at. No one likes to fall in love with a house just to find out they can’t afford it, right? You will also have an advantage over other possible buyers who are not pre approved if there is a multiple offer situation. Let’s just put it this way, it always pays to be one step ahead!
Step 5: Get Out There and Start Looking at Houses…Find One? Make an Offer.
After you’re pre-approved, take a look online at some homes you like in your price range and send them on over to your real estate agent. He or she will then put together a list of homes for you to see, and you’re off! A good tip to remember is that most of the time no one finds the “perfect” house. Take a look at the bones and examine whether or not it has most of what you’re looking for. A lot of the time buyers don’t get every single thing on their wish list. Just keep in mind, cosmetic issues can always be fixed!
Once you find the home that has checked most of those boxes and you think it will be the perfect fit, it’s time to write up an offer! This is one of those tricky steps in the home buying process because no one ever wants to pay too much. However, it is very difficult to know just how low the seller is willing to go. This is where your trusty realtor plays a significant role in the home buying process. Your agent can conduct a comparative market analysis (CMA) to inform you of what recent homes in the area just sold for. This will aid you in making the best offer possible in comparison to similar homes sold price. Your agent will then write up the offer and send it over to the listing agent. The seller can either accept or counter back with a different price. Once a price is agreed upon, time to sign contracts!
Step 6: Apply For a Mortgage With Your Lender
Get ready to dig deep and get out all those documents you knew you were saving for some reason. When applying for a mortgage your lender will ask you for things such as: tax returns, bank statements, employment verification, pay stubs and anything else that pops up that could have an affect on your mortgage. It is critical during this time not to open any new credit cards or make any big purchases that could have an effect on your credit score. Your lender will advise you to wait until your interest rate to make any big purchases. (I know you’re looking at all that awesome furniture. Save it for after you’re locked in!)
Also, during this time a bank appraisal will be conducted on your home. An appraisal is to determine whether the price being paid for the home is a reasonable/fair price as compared to the current market.
Step 7: Home Inspection
A majority of the time a Home Inspection is required by the buyer and contingent on the sale of the home. A Home Inspection is always recommended by your real estate agent when buying a home (even on new construction) because it will give you a deeper look “inside the walls” to see if there is anything wrong with the house. Ask your agent who they recommend and again, it is best to hire local!
Step 8: Final Walk Through
A final walk thorough of the home is highly recommended. It is to ensure the home is in the same condition as when the offer was submitted or to make sure the necessary fixes were made from the home inspection report. Your agent will be present during the walkthrough for any questions or concerns you may have.
Step 9: Closing on Your New Home
Whew! The day has finally come to close on your home and get your keys! Have your signing hand ready, as you will be signing a great deal of paperwork. Your real estate agent and lawyer (if hired) will be there for you throughout the closing to answers any questions or concerns you may have. Understanding everything thoroughly during your closing will make everything seem much less stressful.
Once everything is signed, and the keys have been handed over, you are now officially the owner of your new home. Congratulations!
Step 10: Move In and Enjoy Your New Home.
Time to move in, homeowner. Give yourself a big pat on the back because buying a home is a wonderful accomplishment. Take your time and prepare, don’t rush things and become stressed out. Remember this is supposed to be one of the happiest times in your life. Here are some great tips on what to do before moving everything in to help create a smooth process:
- Change the locks
- Clean clean clean
- Change your address at the Post Office
- Say Hi to your new neighbors!
- Take time and ENJOY!