I love working with first time buyers. Their enthusiasm for this new journey they are about to embark on is contagious. Although each family is different, one concern always remains the same- the process of buying a home is a daunting one, especially for the inexperienced buyer. Aside from looking at houses you like, where do you start? How do you find a good agent? How do you determine your budget? These are questions I get with almost all of my first time buyers.
If this sounds familiar, or you are considering buying a home for the first time and are starting from the very beginning, take a look at my 10 steps to home-ownership.
1. Determine a wish list
Start your research early! Even if you're three or six months, or even a year out, I always encourage my brand new buyers who are several months out from buying to know exactly what they want. Most people already have a good idea of what their criteria is, but it helps to really sit down a think it over. Do you know how many bedrooms and bathrooms you want? Do you prefer single story over two or more stories? Are you willing to make cosmetic changes or undertake a remodel? Do you know what your deal breakers are? Do you have a specific neighborhood or area you want? Do school districts matter for your kids? Thinking about these things ahead of time helps your Realtor narrow down the search process and allows them to show you more homes that fit your exact needs.
2. Find the right real estate agent
This is a critical step and you shouldn't settle! A Realtor is going to become an integral part or your life, so pick someone who you genuinely get along with. When you reach out to a potential agent, does that person keep in contact with you and follow up regularly? If not, find someone else! The last thing you want to do is work with an agent who is hard to get a hold of and doesn't communicate well. Doing your research helps. Look on places like Zillow, Yelp and Facebook to find Realtors that have great client reviews, as well as an active digital presence. You want your future Real Estate agent to not only be tech savvy and in touch with their sphere, but have a solid relationship with previous clients. Once you find someone you think is a good fit for you, be sure to be very open with your expectations for this process. You want to give your agent a chance to meet your needs! Don't be afraid to ask a lot of questions or to be honest with how you are feeling. The buying process can seem overwhelming sometimes, but with the help of a good agent, they will walk you through this process with ease.
3. Get pre-approved
Up there with the very first things you need to do as soon as possible when you are ready to buy is get pre-approved! A lender will help you figure out exactly what you are qualified for and can afford. Through a lender, you can get pre-approved for credit, which involves providing your financial documents (W-2 statements, paycheck stubs, bank account statements, etc.,) so they can verify your financial status. You want to do this BEFORE you start seeing houses. Trust me! The last thing you want to do is begin seeing houses with only your best guess for what your price range is. You will be heartbroken if you are ready to write an offer and find out that it's above your max budget. On the flip side, your lender might show you that you are actually qualified for much more than you think, opening the door to many more potential options in your search. Talk to your Realtor, he or she should have a great referral for a lender. It's important to find an agent who has a preferred lender because most of the time it means you will be a priority to that person. The lender you choose needs to be someone you can feel comfortable calling with questions. Where there is a great agent, there is usually an awesome lender.
4. It's time to start your search
This is where things get really exciting! Now that know what you're qualified for, your agent will start an online search for you based on your exact criteria and price range. Save every single house that you love - you want to be able to see as many as possible! You will likely need to refine your search criteria based on the pre-approval amount. Your taste might event change a little bit once you have started seeing houses in person! Just be sure to let your agent know so they can continue showing you houses that meet your expectations. If you see a property that you’re interested in, make sure to let your agent know the property address. Be sure to ALWAYS have your agent be the one to look up property details for you instead of just calling the phone number on the sign or the website. They have access to information that websites like Zillow and Trulia do not have - many times that includes the correct status of a home.
5. Time to go shopping
Have your agent set up showings for you to see the homes you are interested in. With your agent and their team, try and stick to a weekly showing schedule. Regularly seeing houses with your agent will keep you both focused. The real estate market moves fast! You may see a house you love that goes off the market before you even have time to circle back and see it again at a later date. Searching for a home is a delicate balance between not jumping the gun and settling, and taking TOO much time. Remember, try not to get attached to any home you see unless you write and offer and that offer gets accepted. Things tend to change in a heartbeat in this industry!
6. Make an offer
Once you find your dream home, your agent will walk you through the process of writing an offer before they send it off to the listing agent, whose sellers will usually either accept or write a counter offer to your offer. The process of countering can be a little tedious as both parties have to agree to not only on the price, but several other variables like items staying, who will pay for what closing costs, the move-out and move-in date, etc. Stay patient. Once your offer is accepted things get easier.
7. Congratulations, you're in contract!
This is an incredibly exciting time because this really solidifies your home ownership journey. This is when both you and the seller are contractually bound to terms of the purchase agreement. There are timelines for when inspections need to be completed, the appraisal inspection (ordered by the lender) must be completed, and full loan approval must be received. Staying in close communication with your agent and lender is key. Your lender will be requiring documentation as far as income, employment, tax documentation and large deposits. Make sure to get this to your lender in a timely fashion.
8. Inspections and repairs
Once the transaction is in contract and the loan amount is approved, your agent will schedule a pest inspection and home inspection for your new home. You will need to be present for a walk-through at the end of the home inspection with the inspector and your agent so that you can be clear on the condition of the home, Once inspections are completed, your agent will work with you to create a request for repairs if need be. The request for repairs is your list of things you would like the seller to fix or offer a credit for before the transaction is closed. This process can also be back and forth, so try and stay patient with this as well.
9. You're so close!
All that is left is to sign your final loan paperwork, which is usually done at an escrow company, and do your final walk-through. At this point, you've probably talked to you agent daily for the last 30-60 days, and you both are excited to get this finished! Celebrate with each other, you both deserve it!
10. Move in!
Congratulations! You're a homeowner! Thank your Realtor by leaving them a positive review on Zillow and sending them to your friends and family when they are ready to buy or sell! This is the very best way to show your appreciation for all the hard work they have done for you.