Note that the first step in the home buying process is not to start shopping for homes online and calling REALTORS® for showings. A prepared buyer will always have a huge advantage over an unprepared buyer, and by asking these questions now, you can save yourself from heartache and disappointment down the road.
· What can you afford? Calculate expenses and debts to determine your desired monthly mortgage payment.
· Are life changes coming up? If you plan on changing jobs, getting married or expanding your family, factor these into the equation.
· What do you need? How many bedrooms/bathrooms? Square footage?
· What do you want? Desired location? Age of home? Outdoor space? Pool?
· Gather documents. You’ll need tax returns, financial statements, pay stubs, W-2’s and bank statements.
· Find a reputable mortgage lender. A good loan officer can make or break your experience.
· Get loan pre-approval. Your lender will review all financial information and tell you the amount you qualify for and the estimated closing costs. Make sure your lender gives you a pre-approval letter to prove your buying potential to sellers. You’ll need this before making an offer.
· Choose a good REALTOR®. A knowledgeable REALTOR® is your most valuable asset when finding a home. Make sure you take this step seriously. Ask friends and neighbors for referrals and do online research on the agents before interviewing several of them. A REALTOR® will help you through each step of the home buying process. Read my article WHY DO I NEED A BUYERS AGENT
· Search online. This is the fun part! Make a list of your favorite homes to share with your REALTOR®.
· View homes in person. Your REALTOR® will schedule showings and help you find the perfect home. Be open minded during this stage.
· Decide on price and terms. Your REALTOR® will provide comps so you can decide the price and terms to include in the offer.
· Your REALTOR® presents the offer. The offer is delivered to the seller’s agent for consideration.
· Negotiate the terms. The seller may accept, reject or counter your offer. It may take a few rounds of negotiations to get it right, so hang in there!
· Do due diligence. After the offer is accepted, the next phase includes home inspection, pest inspection, survey, appraisal and title search. All of these activities are coordinated by your REALTOR® and lender.
· Possibly negotiate again. In some cases, you might want to re-negotiate terms upon completion of inspections. Does the house need unforeseen repairs? Are there boundary discrepancies?
· Prepare for closing. Finalize your loan and review closing documents with your lender and REALTOR®.
· Do the final walk-through. This is completed before closing to ensure the property’s condition has not changed since your last visit and any agreed-upon repairs have been completed.
· Sign papers on closing day. This typically takes place in the office of a title company. Warm up your writing hand because you’ll be signing a lot of paperwork!
· Get the keys. Congratulations! You’re a homeowner.