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Friday, April 2, 2010

The Home Buying Process: Step by Step

Buying a home can be a very intimidating process, especially if you've never done it before. So the first thing you should do before you start is to figure out whether owning a home is right for you.

Take into account that if you do buy a home, there are extra responsibilities and costs that go along with it -- such as lawn care, snow removal, home maintenance and repairs, etc. There are also options such as condos and town houses in which your maintenance is much less!

If you've decided that renting is no longer for you and you want to move into your own home. Where do you begin?

Step 1: Figure out How Much You Can Afford

What are you used to paying for rent? I will not put you into a situation where you are paying much more in mortgage than you already are used to paying in rent unless of coarse you can afford to do so and we sit down and go over your finances. (Fill out the “What can you afford” paper that is attached.) Don't forget to factor in money you'll need for a down payment, closing costs, fees (such as for an appraisal, inspection, moving costs, etc.) and the costs of remodeling or furniture. Remember that you don't always have to put down 20 percent as your parents once did. There are loans available with little to no down payment. There are also options such as a seller assist where the seller of the home can actually give you up to 6% towards closing costs.

Step 2: Find a Real Estate Agent (ME!)

This section doesn’t need much explanation. You already found the best one out there! I am here with you every step of the way!

Step 3: Look for the Right Home

Make a list of the things you need to have in the house you buy. Ask yourself how many bedrooms and bathrooms you'll need, how big you want the kitchen to be, if there's an adequate number of closets and cabinet space and if the yard is big enough or even if you want a yard. You may want lesser maintenance like a condominium.

Once you've made a list of your must-have's, don't forget to think about the kind of neighborhood you want, types of schools in the area, the length of your commute to and from work and the convenience of local shopping.

Most of my buyers are looking online now. When I sit down with you I will set you up with Home Pilot which is your personalized home searching tool. I will explain in more detail when we are together but you can send me any houses from there that you are interested in instead of having to e-mail or call me to give me the address.

I can also set you up with an App where you will be able to search for homes right from your phone for free. You can even do a search of the GPS location you are in!

After you see a few that you would like to take a look at we will then go on “tour”! This is the fun part!

Step 4: Make an Offer on the Home

Now that you've found the home you want, we have to make an offer. Each situation is different so when the time comes I will help you come to a price you and the seller feel comfortable with. If you are getting a sellers assist or the price has already dropped and we feel it is priced right then we may offer full asking price. If it is over priced we obviously will be offering less. I will do a CMA (Comparative Market Analysis) to find out how much comparable homes in the neighborhood have sold for.

Bring your check book because you will need to put down a “good faith deposit” (usually 1% of purchase price but could be less). If we don’t come to agreeable terms then your check is simply returned. If we do then the check goes into escrow. The good faith deposit is to show the seller that you are serious about buying their house and is there so you can’t simply change your mind and walk away. If the deal should fall apart we can get this back but it has to be something legitimate. If you try to walk for no good reason then the seller can fight you for this money.

Step 5: We go under agreement!!!! YAY!

If your offer is accepted we start planning your inspections and get a little more serious about mortgage. There are a couple different inspections you would have opted to get done or not to get done. The main ones are the Home Inspection, termite inspections, and Radon inspection. There are also sewer and water inspections available but they are usually only if the house you are buying doesn’t have public water and sewer.

You will also fill out a mortgage application with in 14 days of going under agreement.

Step 6: One more negotiation

After we do the inspections the Home inspector will send us a detailed report. You and I will discuss what you would like fixed if anything. We then fill out our reply to inspection. The seller will either fix what we ask for, agree to fix some of the things, or offer a credit for you to fix whatever is needed after you settle.

Step 7: Get the Right Mortgage for Your Situation

There are many different types of mortgage programs out there. I will put you in touch with a loan officer who will help find you the program that is right for you. Most likely it will be a Conventional 30 yr or FHA 30 yr loan. With FHA you can put down as little as 3.5%! The program she puts you in will depend on things such as your credit, salary, and how much money you have saved.

There are other loans out there such as a 203K loan for major fixer-upper homes. Again, every situation is different!

After this we will get a mortgage commitment & get your home owners insurance set up. There are some other things such as getting a title report to make sure there is no leans on the house but I will take care of that and let you know if something comes up.

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