Homebuying 101: First Time Homebuyers Unite
Welcome back! We are knee-deep into January already, but it feels more like early April. We had highs of over 60 degrees today. Old man winter is coming for us with single digit windchills and the possibility of snow by the weekend. Ah, welcome to Kentucky with her bi-polar weather. But, alas real estate moves on. It really is a fantastic time to buy. For all of my buyers out there, keep in mind that while the spring may seem easier with milder weather, but winter is a great time to buy. The rates are still low and the competition is less, which sometimes can equal a lower selling price!
So today, we are going to walk through some basic steps of the home buying process to help all of our first time home buyers or those that may have forgotten along the way. I'm sure that it is true that this information has been conveyed by tons of people in lots of different ways. BUT, my job here is to provide valuable and timely information in a way that most folks can understand. And bottom-line, one of my most important objectives in real estate is to help people be informed and knowledgeable about what will be, by most accounts, their most expensive investment.
Real estate transactions can, by nature, be one of the most stressful times a family, couple, or person can have to go through. I try to alleviate as much of that stress as possible by communicating clearly, keeping my clients informed during the process, and simply being a sounding board regarding frustrations and fears as we progress through the transaction. Another way to stave off stress is being well-informed about the process you are about to embark on. While buying a home is most likely an exciting time, the stress of the unknown can steal that joy. Not today! Let's walk through what it looks like to prepare, search, offer to purchase, and close on your first home (or your first home in a while)!
So today, we are going to walk through some basic steps of the home buying process to help all of our first time home buyers or those that may have forgotten along the way. I'm sure that it is true that this information has been conveyed by tons of people in lots of different ways. BUT, my job here is to provide valuable and timely information in a way that most folks can understand. And bottom-line, one of my most important objectives in real estate is to help people be informed and knowledgeable about what will be, by most accounts, their most expensive investment.
Real estate transactions can, by nature, be one of the most stressful times a family, couple, or person can have to go through. I try to alleviate as much of that stress as possible by communicating clearly, keeping my clients informed during the process, and simply being a sounding board regarding frustrations and fears as we progress through the transaction. Another way to stave off stress is being well-informed about the process you are about to embark on. While buying a home is most likely an exciting time, the stress of the unknown can steal that joy. Not today! Let's walk through what it looks like to prepare, search, offer to purchase, and close on your first home (or your first home in a while)!
Home Buying 101: Removing the Fear of the Unknown
- Choose a Realtor
I'm sure you're thinking...of course she's telling me to get a Realtor, she is one and wants my business! My response to that is a simple, 'yes, I do!' As a Realtor, I know the importance of having representation as a buyer. Some folks think that it's a great idea to just go it alone in this age of Zillow and the world at our fingertips. I'm with you all...most of the time I choose to do it myself. BUT, we are talking about what will be most people's largest purchase of their life. We aren't shopping Amazon for shoes. There is no returning this if something just isn't right. This is your home and you need guidance and representation. When acting as a buyers agent, your Realtor is advocating for you in the home buying process. There is no fee to the buyer! You won't save any money by not being represented. You will, more than likely, end up paying more. If you take nothing else away from this, please remember this. You want (and need) an agent to represent you during this process.
- Educate yourself of the different types of mortgages that are available to you.
There are many different types of mortgages available to buyers--all depending on different variables, such as: credit score, down payment amount, area of the country (rural or urban), condition of the house (such as HUD), amount of loan, military service, and many more. I will go in depth on some of these loan types in a future post, but finding a knowledgeable mortgage professional is key to success. They are your front line for up-to-date information in the ever changing mortgage marketplace. I'm always more than happy to provide my clients with a list of local options that I have an established history with and know that they work hard for their clients.
- Know your credit score
Knowing your credit score is the most important thing a buyer can do before they even think looking at a house. It's a good idea to get your free credit report annually so that you can be sure all of the information is accurate...kind of like a credit check up. You want a healthy credit score! It takes a little work and diligence, but it's obtainable. Part of being educated about mortgages is going to involve knowing your credit score. Don't avoid it and hope that it's good enough. You want to know! As a buyer, you'll be empowered by the knowledge and be able to walk into a bank or mortgage company confidently knowing that you are ready to buy a home. Knowledge is power, friends!
- Get pre-approved!
Yes, I'm sure you've heard it before, but it is essential! Getting pre-approved keeps your expectations in check and helps you, as a buyer, make informed purchase decisions. Also, let's be real, it saves alot of time that could be wasted chasing down homes that you won't be able to purchase. That is always a heartbreaker! So, my first rule of thumb is having my clients get pre-approved. That way we aren't spinning our wheels and wasting valuable time. There is nothing worse than searching for properties, setting up appointments, driving around all day and looking at beautiful houses, and then the financing falls through. Bottom line...get preapproved! You want to be an educated and equipped buyer. This is an important step.
- Know your non-negotiables in your new home.
While these may shift and change a bit, knowing what is a non-negotiable in your new home is pertinent information to relay to your agent who is working diligently to find your perfect house. Help them to help you!
Things to think about:
- Number of bedrooms and bathrooms?
- Steps or no steps?
- Neighborhood or school district?
- Garage? Basement? Man cave?
And yes, you may not know exactly what you want OR your ideas may change once you begin viewing properties, but keep this thought in the back of your mind. Remember communication is key so let your agent know what you're thinking as well!
- This is the perfect home! Now what?
This is where the rubber meets the road. There will be lots of things happening simultaneously, but no need to fret! You're informed and will know exactly what to expect we progress through the process!
1) Time to write up an offer to purchase. Your Realtor will walk you through the paperwork and explain the contract then when you're comfortable, the contract will be submitted to the seller's agent.
2) Offer accepted! You're under contract. What does that mean? After all parties are in agreement with the terms of the contract, you are officially under contract and your new home will appear as pending. So now what? Now you begin the run towards your closing date! In the next couple of weeks you will probably have a some of the follow items occur: complete property inspection by a licensed inspector, termite inspection, radon inspection, appraisal, and hopefully in a few weeks you'll hear those magic words..."Cleared to close!"**I will go in depth on these items in another post. This is just an overview.**
Happy Home Buyers!
3) Cleared to Close! Those magic words mean that all of the underwriting requirements from the bank have been met. Everything that needed to be done to make sure that your new home is in good condition has been completed. 48 hours prior to your closing date, you will do a final walk through with your Realtor to ensure that the property is in comparable condition as when you put in an offer and that all requested repairs had been completed.
4) Closing Time! A closing is where you and the seller sign all the necessary paperwork to transfer ownership to you. Also, during that time you, as the buyer, will sign your life away...ahem, I mean you will sign all of the paperwork to finish up your mortgage loan. It's an exciting time! But bring your strong signature hand because you will be signing a ton of documents. Ask questions if you have any...make informed decisions always. NEVER sign anything that you don't fully understand! Closings usually take about an hour (or less) and can occur just about any place that all parties agree to. There will typically be an attorney present as well as your loan officer, seller and their agent, and you with your agent. And that's it! You're officially a new homeowner!
Whew! That's alot of information, but it's simply an overview. Buying a home isn't simple or easy, but the process can be manageable with knowledge and an excellent Realtor representing you! Please don't hesitate to reach out with any questions or concerns you may have. And if you have a burning real estate question, please email me or comment below! I'd love to address your concerns in a future post! Have a great day!
- Know your non-negotiables in your new home.
While these may shift and change a bit, knowing what is a non-negotiable in your new home is pertinent information to relay to your agent who is working diligently to find your perfect house. Help them to help you!
Things to think about:
- Number of bedrooms and bathrooms?
- Steps or no steps?
- Neighborhood or school district?
- Garage? Basement? Man cave?
And yes, you may not know exactly what you want OR your ideas may change once you begin viewing properties, but keep this thought in the back of your mind. Remember communication is key so let your agent know what you're thinking as well!
- This is the perfect home! Now what?
This is where the rubber meets the road. There will be lots of things happening simultaneously, but no need to fret! You're informed and will know exactly what to expect we progress through the process!
1) Time to write up an offer to purchase. Your Realtor will walk you through the paperwork and explain the contract then when you're comfortable, the contract will be submitted to the seller's agent.
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| Happy Home Buyers! |
3) Cleared to Close! Those magic words mean that all of the underwriting requirements from the bank have been met. Everything that needed to be done to make sure that your new home is in good condition has been completed. 48 hours prior to your closing date, you will do a final walk through with your Realtor to ensure that the property is in comparable condition as when you put in an offer and that all requested repairs had been completed.
4) Closing Time! A closing is where you and the seller sign all the necessary paperwork to transfer ownership to you. Also, during that time you, as the buyer, will sign your life away...ahem, I mean you will sign all of the paperwork to finish up your mortgage loan. It's an exciting time! But bring your strong signature hand because you will be signing a ton of documents. Ask questions if you have any...make informed decisions always. NEVER sign anything that you don't fully understand! Closings usually take about an hour (or less) and can occur just about any place that all parties agree to. There will typically be an attorney present as well as your loan officer, seller and their agent, and you with your agent. And that's it! You're officially a new homeowner!
Whew! That's alot of information, but it's simply an overview. Buying a home isn't simple or easy, but the process can be manageable with knowledge and an excellent Realtor representing you! Please don't hesitate to reach out with any questions or concerns you may have. And if you have a burning real estate question, please email me or comment below! I'd love to address your concerns in a future post! Have a great day!
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