Buyers

Find a Home

Learn About the Home Buying Process

If you’ve made it this far down the page you are probably more curious on how to buy a home rather than the particular home you want to buy.  It’s very easy to absorb too much information on buying a home.  Especially if you are buying your first home.  Everyone has written something that will leave you with more question than answers.  So the point here is to give you the high points.  That is to say, just the information you need to get started.

First Things First: Mortgage Pre-Approval

Unless you just came into a pile of cash or are independently wealthy you are going to need a mortgage to purchase a home.  The first step in getting a mortgage is to get pre-approved.  This is a fancy way of saying a loan officer is going to look at your credit score (don’t panic), your income and your debt.  From there they will tell you how much of a mortgage you can get approved for.  How much you can get approved for and how much you can afford are usually two different numbers.  Don’t get ahead of yourself.

How Much Can I Really Afford?

This is the million dollar question.  Normally it’s more like the $150,000 question.  The idea here is to come up with a number you can comfortably afford.  Most likely you will have this payment for quite some time.  The easiest way to come up with a  number is to use an affordability calculator.  This fine piece of computer technology will let you put in a price and then will tell you how much of a mortgage that equals.  I cannot stress enough, don’t stretch yourself too thin.  Owning a home is an expensive proposition.  Come up with a number you can really afford.

Develop Your Must Haves

Everything to do with homes falls into two categories.  These are “Must haves” and “Nice to haves”.  The must haves are things like requisite number of bedrooms and bathrooms.  Nice to haves are things like hot tubs, 6 car garages and rooftop gardens.  This may seem very simple to figure out, but make sure you are taking everything into account.  For example, think about if you are planning on children.  It would be much cooler if they had a place to sleep.  Storing children under the stairs is frowned upon in most civilized societies.  Think about your parents.  Is there a possibility they would need to come live with you if their health took a downturn?  The point is to not focus on what your life is now, but what could happen in the future.

Focus on an Area

Try to figure out what area of town you would like to live.  In most situations, your budget will help you decide this.  In all my years of practicing real estate it always seems that buyers could get everything they want, if they just had $25,000 more than they do.  This is the time to be reasonable.  If your budget is half of what homes are selling in an area, it’s not looking good.  You don’t have to narrow it down to one area.  Come up with a plan A (most desirable), plan B (very desirable), and plan C (desirable and we can afford it).

Use the Force

And by the force I mean the internet.  You have thousands of real estate sites available to you.  They all have basically the same information.  Stick with the big 3. Realtor.com, Trulia.com and Zillow.com.  These three have the most up to date information.  Your goal here is to spend time looking at homes in your target area.  This is designed to educate you on what it costs to live where you want to be.  Your Realtor will help you, but take this opportunity to become an educated consumer.  You are talking about one of the largest single purchases you will ever make.  Research your next home more than you do your next cell phone.

Get Your A** in The Car

Now that you have narrowed down your area, have a realistic budget and are pre-approved for a mortgage, it’s time to look at some homes.  You will need a Realtor for this.  You will need YOUR OWN Realtor.  Do not be “calling all the signs guy.”  You won’t be taken seriously.  If you prepared your requirements right, you should only have a handful of homes to look at.  A handful of homes is eight or less.  If you have a list of twenty seven homes to look at, go back and start over.  If you disregard this sage advice you will become frustrated and overwhelmed.  You will have a nervous breakdown.  My mom looked at 40ish homes before buying hers.  This was thirty years ago.  It still takes a toll on her.  She’s absolutely terrified to move.

Find “The One”

This isn’t going to be like the real estate commercials on TV.  You most likely aren’t going to walk in the front door of a home and fall in love.  I know this is very underwhelming to you.  You will know the right home for you very quickly though.  Just keep in mind that there are no 100% homes.  That means your new home won’t have 100% of all the things you want.  One of the bedrooms will be smaller than you wanted or the garage will be too small.  There is a 100% house out there for you.  Unfortunately it will cost about $25,000 more than you have.  Find the 95% house.  The house that has 95% of everything you are looking for.

Write an Offer

This is the part that can go all sorts of directions.  The advice I can give you is LISTEN TO YOUR REALTOR.  How this process goes has a lot to do with the current real estate market.  For example, many homes are selling for full price in a couple of days right now.  If you think you can offer 80% of the list price with a page of contingencies it’s just not going to happen.  Listen to your Realtor, they are there to represent and protect you.  If you don’t feel like your Realtor is going to do that, it’s very simple.  Find a better Realtor.

Hammer Time

Really more like inspection time.  Do not ever purchase a property without a home inspection.  That would be like agreeing to marry someone on a blind date.  Just not a good idea.  The home inspection will evaluate all the systems in the house and give you a painfully long report on the condition of each.  Depending on the terms of your offer (and what state you are in), your Realtor will draft up a repair request. This is not the time to ask for thirty eight pages of repairs.  Focus on safety and mechanical issues.  Ask for hot water heater to be repaired or replaced.  Don’t ask for doorknobs to be tightened.  Be careful about asking for aesthetic repairs.  These will most likely be done in the cheapest way possible.  Take care of the painting and such yourself.  This way it’s done right and with good materials.

Appraisal

Your loan officer will order an appraisal on the property.  This is where an unbiased third party will come in and evaluate the value of your new home.  I would never want this job.  The appraisal is designed to protect you and the lender.  If the appraised value comes in lower than what you offered to pay for your new home, you can normally get out of the contract.  Your Realtor will have more details should this happen to you.

Paperwork

Your loan officer will needs tons and tons of paperwork from you.  This will include bank statements, paycheck stubs, affidavits of this, disclosures of that, etc.  Your job is to make sure that these get back to the loan officer as fast as humanly possible.  Until your loan officer has everything, your loan can’t be processed.  This is the most irritating part of buying a home.  Don’t make it worse by being slow to respond.

Closing

Closing is the fun part.  This is when you get the keys to your new home and can move in.  The less fun part of this is signing your name over and over for all the loan paperwork.  Listen to the closing attorney and ask questions if you don’t understand something.[/vc_column_text][vc_column_text]

Move in and Live Happily Ever After

It’s exciting moving into your new home…at first.  Then you realize it’s still moving and is not fun.  Corral all your friends and family to help.  Provide food and beverages.  They’ve got to keep their strength up in order to get your sectional in the house.  Enjoy your new house for three days.  Then, it’s time to go buy a lawn mower and get to work.