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10 Steps To Buying A Home
Step 1) Research your Local Housing Market. This is very important, because it will give you an idea of how much the average home within your criteria costs. You can do this by looking at home magazines or browsing Zillow or Homes.com. Don’t have time for this? That is what I am here for, trained and up to date on local housing trends and can answer all of your questions.
Step 2) Find out How Much House you Can Afford. For this one you can utilize one of many online affordability calculators to determine a rough price range for your search. This one is a good one: http://www.bankrate.com/calculators/mortgages/new-house-calculator.aspx
Step 3) Get a Prequalification Letter. Now it’s time to actually speak to a mortgage lender either in person or on the phone. Many lenders even have forms you can fill out online, answering a few questions about your household income and expenses. This information is reviewed and you will be given a prequalification letter. This will provide you with a better idea of the price range of homes you should be looking at. Do you need a recommendation for a great local lender? Let me know and I will be happy to help.
Step 4) Speak with your Real Estate Agent to Start the Home Search Process. I am a real estate agent myself and my advice here is to interview more than one agent in order to find the perfect fit for your family. The real estate agent you end up working with will be someone you will trust to find a home for you and walk you through the entire process, so you want to make sure that you work well together.
Your chosen real estate agent has to have knowledge of the local housing market, know about different neighborhoods, and understand the home buying process. In addition, a great real estate agent is familiar with the areas you want to live in and will negotiate the best deal for you. AND here is the greatest news for you: It doesn’t cost you anything to use a real estate agent. The buyer’s agent is compensated by the seller’s proceeds on the sale of the house.
Step 5) Shop for your Home. Let the fun begin. With the help of your real estate agent start touring homes in your price range and within your criteria. Take notes as you go through each home, so that you can weigh the pros and cons. Once you find the home that you love, your real estate agent will guide you in determining a strong offer depending on comparable homes recently sold or still on the market. The real estate agent will then write up the offer for you and submit to the seller’s agent. During this step, the agents of both parties get into negotiations on behalf of their clients. Once both parties come to an agreement, your real estate agent will open escrow. This simply starts the closing process to get all the necessary things together to close the deal.
Step 6) The Home Inspection. When the offer gets accepted you will have 10 days to complete a home inspection on the house. This is a very important step in the home buying process as the offer is contingent upon it. A home inspector will give you a full report of signs of structural damage and any items that may need fixing. You then have the chance to ask the seller to fix the items, or to get out of the deal if there are any major issues. Of course your real estate agent will schedule the inspection for you and counsel you to make all the major decisions.
Step 7) Select and Secure your Loan. Right after the acceptance of the offer, you should start working with a mortgage lender on the type of loan you would like to use for the purchase of your home. At this point, the lender will ask you to provide documentation to verify your financial situation. Work closely with your mortgage lender to ensure they have the required documents as soon as possible.
Step 8) The Home Appraisal. Your lender will arrange for a home appraisal. The appraised value of the home lets you and the lender know that you are paying a fair market price for the home. If the appraised value is lower than the accepted offer, then your real estate agent will counsel you about your option, one of which is to reopen negotiations.
Step 9) More Paperwork. Your lender will work with a title company to make sure that the seller is the rightful owner of the house. In addition, the escrow agent will arrange for the paperwork needed to close the deal.
Step 10) Closing. You are almost there. At closing you will sign all the final paperwork to complete the sale. This includes your loan documents. The escrow agency takes care of everything after this, including forwarding the loan documents to the lender for their review. Once the lender has reviewed the documents and releases the funds, escrow submits all the original documents to the County Recorder for recordation. The day recordation happens is also commonly called “Close of Escrow”. After the recordation notice, your real estate agent picks up the keys and typically will meet you at the house.