10 Steps to Buying a Home
Knowledge and experience are the keys to making your real estate transaction a success. The expertise, experience, and training of local REALTORS® at eXp can be the key to your success in buying a home. Make sure to plan along the way. Having a REALTOR® will assist in your planning, and eliminate some of the stress of buying a home. Knowing the marketplace with the assistance of a REALTOR® and knowing the answers to the questions below will help define your buying goals.
1. Define What You Want What type of home do you want? Whether you are a first- time home buyer or a repeat buyer, ask yourself why you want to buy. Are you planning to make a lifestyle change? Is buying a home an option or a requirement? What do you want in your new home that your current home does not have? What do you want in your new home that your current home has? Do you have a timeframe to purchase a new home?
Do you have the money? Financing is important when buying real estate. The pre-approval process allows you to know ahead of time how much house you can afford. There are many new innovative loan programs where you can purchase a home with 5 percent down or even less. There are still a FEW programs that allow the purchaser to buy real estate with nothing down. In addition to planning for a down payment, a purchaser will also need cash for closing costs. The closing costs are all the fees associated with the loan. Your lender or a lender recommended by your REALTOR® can assist you in getting a good faith estimate that will estimate closing costs on a particular loan amount and loan program. Less money down on the mortgage means your monthly payment will be higher. Most purchasers have a monthly amount that they wish to budget for a mortgage payment, so we can plan the down payment according to that and the programs available to a particular buyer. Your REALTOR® can also help to negotiate closing costs as part of your contract when making an offer.
Are your Finances in Order? Debt and your credit score effect the loan programs that are offered to you. Be sure to keep your finances in good standing before purchasing a home.
2. Get a REALTOR More than 2 million people in the United States have earned a real estate license. It is imperative that you find a REALTOR®, such as the eXp team who will work well with you and your family. Make sure to plan along the way. The National Association of REALTORS®, which includes 1 million brokers and salespeople, is guided by a strong Code of Ethics. NAR members are active in committees and organizations in the community. This provides REALTORS® with a better understanding of the area in which they are selling. Buying and selling real estate is a complex and sometimes stressful process. At first it may seem that you can find the right home at the right price on your own. Keep in mind that all properties are unique, and they come with different contract terms, financing options, inspection requirements, and closing costs. It makes sense to work with a professional who knows the community and cares about YOU! It’s not just a home; it’s your home! It’s not about the home. It’s about YOU!
How do you choose a REALTOR®? In every community your will find a variety of brokerages, but be sure to find a REALTOR® who will offer the best marketing for your home and look out for your interests along the way. Read more about why the eXp team is the right fit for you real estate needs.
What should you expect from a REALTOR®? You should expect a respectful business relationship from a REALTOR®. The agent should keep you informed of the current market conditions, financing options, and negotiating issues that might apply to a given home. Your realtor should keep you updated in each step of the transaction process, whether it’s buying or selling a home.
3. Get Loan Pre approval Few people are able to buy a home with cash. According to NAR, nine out of ten buyers finance their purchase. The real issue is not getting a loan, but getting a loan that is right for you. The goal is to get a mortgage with the lowest costs and best terms.As a consumer, start the mortgage process before making an offer on a home. Lenders are available anytime to get you pre approved. Your REALTOR® can refer you to a lender if you do not have one that you are comfortable using. Many contracts require buyers to apply for financing within a certain period of time, often 7 to 10 days. By meeting with loan officers in advance, the buyer is not rushed to find a lender, check credit, and rush into a financial decision.
What is a Pre approval? Pre approval means your credit files have been reviewed by a loan officer and the loan officer believes that you can readily qualify for a given loan amount with a specific mortgage program. The lender will provide you with a pre approval letter that will verify your buying power. Pre approval is not a final loan commitment. It demonstrates to a seller your financial strength and shows that you have the ability to go through with a purchase. This information is important to sellers. It assures them that you will be able to obtain financing.
4. Look at Homes There is no shortage of options for homes in the Triangle. With so many choices, the challenge becomes finding the property that fits your needs. Your REALTOR® can assist with this.
What are you looking for? A home is more than a collection of rooms. Each buyer is different so it’s important to list the features and benefits that you want in a home. What are your needs? What are your wants? What are your priorities?
How do you find a home? Through your REALTORS® knowledge of the market and area that you are searching and knowledge of your wants and needs, a home for you can be found. Your REALTOR® can set up custom searches for homes that fit your needs and price range. Constant communication with your REALTOR® is important.
5. Choose A Home Choosing a home is the biggest decision and you want to choose the right one in the right area! There is no aspect of the home buying process that is more complex, personal, or variable than bargaining between buyers and sellers. This is the point where the value of an experienced REALTOR® working on your side is evident. REALTORS® know the community, know the homes, and know the value of strong negotiations.
6. Get Funding Because Financing is so important in the home buying process, buyers should have as much information as possible on mortgage options and costs.
What kind of loan do I need? There are many loan programs available with a variety of lenders, but the mortgage you choose will be determined by the following:
- Down payment
- Credit score
- If you are a first time home buyer
7. Make An Offer REALTORS® can explain the general contracting process in your community as well as their role in the process. The process of making an offer varies around the country. Here in the Triangle, have your REALTOR® complete an offer to purchase as well as any addendums that need to be included with the contract. The REALTOR® will present the offer to the seller, and negotiations will begin. Having a REALTOR® who is a skilled in negotiations will be an advantage in the purchasing process. Inspections A number of inspections are common in a real estate transaction. Most buyers will want a termite inspection, a survey of the property, an appraisal, title review, and structural inspections. Licensed home inspectors will complete the inspections, and again, your REALTOR® can recommend a reputable home inspector in the area.
8. Get Insurance Homeowners need insurance to protect their investment in the event of a catastrophe. There are many forms of insurance associated with home ownership. Each homeowner needs the following: Title Insurance – Title insurance is a one time fee at closing. This protects the buyer in the event that the title to the property is invalid. Homeowners Insurance – This provides fire, theft, and liability coverage. Most lenders require a homeowner’s policy. Also make your insurance agent aware of any specific valuables such as jewelry and office equipment. Flood Insurance – Your REALTOR® will let you know if your home requires flood insurance. Home Warranties – With a new home, the builder will provide a home warranty. It is also recommended to purchase a home warranty on a resale at the time of closing.
9. Closing In the Triangle, attorneys represent the buyer in a real estate transaction, and this attorney will close the home. The attorney will conduct settlement and the title to the property will be transferred from seller to buyer. Deeds, loan paperwork, and other documents are prepared for closing and signed and filed to be recorded. It is recommended that the buyer has a walk through the property prior to closing to assure its condition has not changed since the contract was signed.
10. What’s Next You did it! You viewed properties with your REALTOR®, made an offer, obtained financing and closed! The home is YOUR HOME! Is there any more to the home buying process? Whether you’re a first-time buyer or a repeat buyer, there are several more steps you’ll want to take. The papers you received at settlement are extremely valuable, so hold on to them! In the short-term, they can help establish tax deductions for the year in which the property was purchased. In the future, such papers will be important for tax purposes when the property is sold, and in some cases, for calculating estate taxes. Create a file for all of these documents. Also at closing, determine the status of the utilities required by the home, items such as water, sewage, gas, electric and oil service. You want utility bills to be paid in full by owners as of closing and you also want services transferred to your name for billing. Usually such transfers can be done without turning off utilities. Your REALTOR® can provide contact numbers and related information so that transferring the utilities is simple. Two weeks after closing, contact the Wake County records department to make sure that your deed has been recorded.
Moving In It is generally understood that sellers will leave homes “broom clean” when moving out. This expression does not mean “vacuumed” or “spotless.” Broom clean makes sense because it means the house is ready to be painted and cleaned.
Your Home, Your Money For most people, a home is the largest single asset they hold, so it makes sense to protect that asset. Make a photo or video record of the home and their possessions for insurance purposes. Keep the records in a safety deposit box. Your insurance provider can recommend what to photograph and how to secure it. You want to maintain fire, theft and liability insurance. As the value of your property increases such coverage should also rise. Again, speak with your insurance professional for details. Enjoy your new home! Owning real estate involves contracts, loans, and taxes, but ultimately what’s most important is that home ownership should be a wonderful experience. It’s not just a home, it’s your home! To receive more helpful tips about how to navigate the Raleigh real estate market as a Raleigh home buyer, contact us, eXp, your Raleigh real estate expert, today.