Not everyone is a veteran home buyer. Buying your first home is an exciting time, but it can also seem a bit daunting if you are not familiar with the steps in the process. To help you feel more like a home buying pro, we have put together a 10 step guide to the home buying process.
Step 1: Know What You Can Afford.
If you are planning to finance your new home purchase, you need to talk with a lender and determine the amount of financing and the down payment for which you qualify. Once this is done, the lender can provide you with a pre-approval letter stating the amount they are willing to lend. If you need help finding a lender please give us a call.
Step 2: Determine The Criteria For Your Home Search.
How many bedrooms do you need? How many garage spaces? In what town would you like to live? Is a basement important? And so on. It is also important to talk with your real estate professional to help guide you on the wish list and what is realistic.
Step 3: Contact Us To Start Your Home Search.
There are many reasons you should use a REALTOR to purchase your home. First, they don’t cost you anything. REALTORS are paid by the REALTOR who is selling the home. This payment is already set in the contract the home seller has with the REALTOR. So since our services are free to you, why not use them. We have helped clients buy and sell over a quarter billion dollars worth of residential real estate and we are experts in the home buying process. We will help you find the home that best meets your criteria. We may even know of some homes that are not actually on the market but potential purchases. We will give you our expert opinion on the actual value of the home you choose and help you determine what price to offer to the seller. We will negotiate on your behalf with the selling agent for that home. We will be with you every step of the way.
Step 4: Making An Offer.
After you have picked the house you would like, it is time to determine what the actual market value is on that home. We will do a market analysis on the home you have chosen to determine its worth. Then we will suggest to you the price with which you should start negotiations.
Step 5: You Have A Deal.
Once you have an agreement, it is time to sign the contracts and produce any earnest money. Earnest money is a small down payment to hold the house for you. This money traditionally prevents the buyer from changing his/her mind for no reason. This does not prevent a buyer from walking away from the deal for legitimate reasons.
Step 6: Attorney Review.
Now that there is a legal contract, it is time for your attorney to review it. Typically there is a five business day period when the attorneys on both sides look at the contract and can modify or void the contract if they think the agreement has been done poorly.
Step 7: The Home Inspection.
The buyer of the home hires a home inspector to come out to the property and check it thoroughly for any issues. These could be minor issues, like the outlet in the bathroom is not to code, to larger issues such as the foundation on one side of the house is failing. If issues do arise, they are negotiated as part of the deal. You can ask for the homeowner to fix the issues or provide funding at the closing for you to fix the issues after you own the home. If an issue is found during the inspection that concerns you so much that you no longer want to purchase the home, the contract can be cancelled and your earnest money refunded.
Step 8: The Radon Test.
“Radon (ray-don) is a chemical element with the atomic number 86, and is represented by the symbol Rn. It is a radioactive, colorless, odorless, tasteless noble gas, occurring naturally as the decay product of uranium or thorium…is considered a health hazard due to its radioactivity.”
Sometimes Radon is found in the lower levels of a home, so typically a buyer will pay to have a radon test performed. This type of test will check for the presents of the substance. If elevated levels of Radon are found, Radon mitigation can be performed to bring the levels down to an exceptable level.
References: 1. Source Wikipedia : http://en.wikipedia.org/wiki/Radon
Step 9: Securing Your Financing.
Usually if you are going to finance the purchase of the home, the contract will state a date when financing has to be secured. Once home inspection issues have been negotiated it is time for your lender to go to work. Most of this process will be paperwork between you and your lender but one major part of the process is the appraisal. The bank wants to make sure that the home is worth the money they are lending on it. So they send out an appraiser to look at the home and compare it to other homes that have sold in the area to determine its value. If the home does not appraise, there are several options. One is to ask the seller to reduce the price to match the appraisal. The seller may disagree with the appraiser and prefer to protest the appraisal. Or you may decide not to buy the home and cancel the contract.
Step 10: The Closing.
The closing day is the day when you actual become owner of the home. The seller and/or the seller’s attorney meet in a room at a title company with you and your attorney to sign the final paperwork and make sure funding is produced. The title company checks all the paper work and makes sure everything is correct. They also insure the deal in case some fraud or error occurred. But assuming that the funding was produced and the papers have all been signed, you are the owner of the home. Now the hard part begins, moving!
This 10 step guide can be found on our real estate website here.
We hope this helps those of you new to the home buying process. Call us today at 847-963-0400 to help plan your next move. Search for a home on our website here.