So you’re thinking about buying a house. First of all, I’d like to say congratulations. This is so exciting and I know that you’ve got to be thrilled about this adventure you’re about to take. The first thing you need to do is decide to buy. Is it a good time for you financially? Does it make sense? Is your credit score in order? Have you got the money that you’ll need for a down payment? You need to make sure that you’re not going to strap yourself financially by making the decision to buy.
The next step would be to hire a realtor. You need an expert, somebody that knows the market inside out and can do the job with their eyes closed. You need someone that’s going to be able to tell you everything that you want to know about a certain area. That way you feel like you’re able to make an educated decision based off of what kind of house you’re looking for.
Next, you’ll need to get pre-approved. If you plan on obtaining a mortgage, we like to have a pre-approval letter. That way, we can see how much you can afford. Next, we’ll choose a home. Your realtor should have done what’s called a needs analysis with you. That way he or she fully understands what you’re looking for in a home. Then you’ll take the time to go out and preview properties, look at homes that fit that criteria, and once you select your home, well, it’s time to make an offer.
Before you make an offer, your real estate agent will prepare what’s called a comparative market analysis. This gives you an analysis of the entire neighborhood to make sure that what you’re offering is fair value to what the rest of the properties of the neighborhood are going for. You’ll write the offer and it will include things such as a price, a closing date, any contingencies, whether it might be a financial contingency because you need to get loan approval, or a contingency to sell a previous house. Whatever the case may be, all of this will be written into the contract.
The seller then has the choice to accept, reject or counter-offer the contract. At this point, your real estate agent will negotiate for you on your behalf to make sure that you get the best deal and the best value for the home that you’ve chosen.
Once we find the right home and get a contract accepted, we’ll need to collect what’s called an earnest money deposit. I like to describe this like when you go to get a rental car. They ask you to put a deposit down and once you return the car, you get that deposit money back. An earnest money deposit on a house is very similar to this. You’ll put money down and that just secures your spot in getting that home. If anything happens between the inspection period or the loan approval process, that money can be refunded. In the meantime, if you do decide to proceed forward with that home, that money will be counted towards your down payment instead of in addition to.
Next we’ll start the 10-day inspection process. This gives you time to get an inspector out to the home, which your realtor will coordinate for you. Having an inspector inspect the home will guarantee that there’s no structural defects or whatnot to the house that could affect you wanting to purchase the home. Remember, with an inspection, you’re looking for structural issues. A lot of cosmetic things such as paint, carpet, things like that, will not be considered.
Next is the loan approval process. Within five days of finding the home and having an accepted contract on the home, you’ll go back to the officer that pre-approved you for the house and you will go through a formal loan approval. Be sure to stay in constant communication with your loan officer as they’ll have questions to guide you through the loan process.
Next you’ll get insurance. The first year, insurance is paid up front. Your homeowner’s insurance and possibly flood or hazard insurance will be paid before closing. Every year after that, that premium will be rolled up into your escrow account and come out of your monthly mortgage payment.
Lastly is closing. You’ll get to sign all of your documents, the deed will be transferred from the current seller to you, and you’ll receive all of your keys, your manuals, and whatever else that came with the house. So what do you do after the home closes? Well, your realtor will be there to help you. Your realtor will be able to help you find contractors to do renovations on your new home. They’ll be there to help guide you through the homestead exemption process so that you get a [inaudible 00:04:55] taxable value on your home. They’ll be able to help you file your first tax return as a homeowner, and they’ll also be available to help your friends and family find houses as well. Also, be sure to check with your local realtor on the value of your home. They can stay on top of your home value so that way you know that you got the best possible deal.