First Time Home Buying
Steps anyone can take to make the process first time home buying easier. Covers everything from search criteria to closing the deal.
Buying a home can be a real hassle, especially if you’ve never done it before. Luckily, there are a few simple steps you can follow to make the whole process smoother.
1. Select a realtor.
You need someone who is going to look out for your interests and only your interests. A so-called “buyer’s representative” has a responsibility to be loyal to you and to help you make informed buying decisions. Your buyer's agent represents you, and you should be able to rely on him or her to point out the advantages and disadvantages of each home you inspect. A buyer's agent is legally obligated to protect your best interests.
2. Get financing before you start.
Get pre-approved by at least one mortgage lender before you start looking for a home. That way you’ll know the maximum amount you can afford to spend. Be sure the lender makes a written loan commitment and ask for a 90- or 120-day rate guarantee.
3. Know exactly what you are looking for.
Selecting the type of house you want and all the features you prefer will cut down the list of available homes you’ll need to look at. You’ll find that a lot of realtors use databases so they can match clients and homes quickly. There are physical considerations: the size of the house, the size of the yard, the number of bedrooms and bathrooms, and special features you need. Intangible considerations could include: comfort, privacy, security, and convenience.
4. Check out the neighborhood.
Once you have a list of houses, spend some time getting to know the neighborhood each is in. This will help you determine if the area will meet your requirements. Pay attention to: the local amenities, educational facilities, distance to work, etc. You may want to visit at different times of the day to get a true feeling for the area.
5. Choose what is right for you.
After picking a neighborhood, you can start the viewing process. Be sure to see all the homes in your range before making an offer. This will let you get familiar with what kinds of features and price ranges are available. Take notes about each house and grab any sales literature you can find. This will make comparing the houses easier.
6. Look at the market.
Have your agent prepare a market analysis on the home you want. You can avoid offering too much by comparing recent sales prices of comparable neighborhood homes with those currently available for sale. This information will help you work out a reasonable offer. It will also help your agent justify your offer.
7. Talk to your agent about the negotiation.
There are a number of factors to think about during negotiation. These include but are not limited to: price, deposit money, financing, possession date, and inspections. Make sure that the seller discloses all defects in a written vendor disclosure prior to submitting an offer. Your agent will need to know how far you are prepared to go in order to purchase the home.
8. The agreement
A properly drafted offer should deal with all issues important to you and leave no room for interpretation. A “firm offer” means that there are no restrictions placed on the purchase. A “conditional offer” means that the buyer has placed one or more reservations on the purchase, and it cannot be completed until all of the conditions have been removed. These conditions may relate to the allowance of a home inspection or results of any tests. Always include a professional home inspection clause in your offer, even for a new home. Make sure your offer states that you get your deposit back if your offer has been accepted but all of the conditions are not met (by either party).
9. After the offer
You will need to contact a lawyer to help you obtain a clear title to the property, arrange for the transfer of money to the seller, and gather all paperwork related to the transaction.
10. The last detail
Your banker will require you to sign various legal documents related to the mortgage loan on the property you are purchasing. Make sure you fully understand what you are signing. If you have shopped around for financing, you should have a good idea of what are “standard fees” and what aren’t. Because of competition, you may be able to get many such fees waved. It never hurts to ask. On the day of closing, you will need to meet with your lawyer to sign all the documents and acquire the keys to your new home.