12 Steps to Buying a Home

The home buying process can seem like a lot and at times overwhelming at times, but I assure you it's not as hard as most buyers make it out to be.

In order to help give you all a clear picture of how the home buying process goes, I've created a 12 step guide to explain it a little better. Just keep on scrolling if you want to learn.

1. CHECK YOUR CREDIT SCORE

First thing you need to do is check your credit score. This is for all three credit bureaus, Equifax, TransUnion and Experian. Viewing all three will give you an idea of where your credit falls with all three different bureaus and also let you know exactly what you need to be working on fixing if necessary, for either one them. You need to pull and work on all three because you never know which one the mortgage company will pull from. You want to make sure all your scores meet the credit score requirement to get a good interest rate

Just to add a little about your credit score and evaluating your scores, please DO NOT use Credit Karma as your main source. It has been known for being inaccurate and really should only be used as a way to keep track of what's being reported on your credit.

2. SAVE FOR DOWN PAYMENT & CLOSING COSTS

After you find out where your credit stands, it's time to get to saving. Depending on your credit score, you may have to put down a hefty amount when it comes to your down payment. And in addition to your down payment, you'll also have closing costs.

Often times people seem to think that down payments and closing costs are one in the same, but I'm here to tell you that they are not. Your down payment has to do with a percentage you'll have to pay down on your home based on the sales prices. For example:

If your home sale price is $300,000 and your pre approval states you have to pay 3% down payment, that means you're required to pay a $9000 down payment in order to secure the home. Kind of like if you're buying a car and you have to put down $2000 in order to walk away with the car.

**We offer down payment assistance as well. Check to see if you're eligible in your area here**

As far as closing costs, these are costs associated with your actual closing to complete the real estate transaction. Once you're clear to close on your home, closing costs could include, but are not limited to loan origination fees, title searches, title insurance, surveys, taxes, deed recording fees, attorney fees, etc.

3. DETERMINE HOW MUCH HOME YOU CAN AFFORD

No matter what you do, everything involves setting some sort of budget. After you get pre approved, you'll then know just how much the bank is willing to loan you for your dream home, but then you'll have to take a real look at your finances and determine just how much home you can truly, comfortably afford

Just because the bank loans you $500,000 for a home doesn't mean you have to use the entire amount. A home at that price could very well cost your thousands of dollars a month which might put you in a financial strain. This is when you should sit down and calculate all your current expenses versus your income and determine a comfortable mortgage amount.

The first goal is to get yo u in the house, but the ultimate goal is for you to be able to keep the house. You must take into consideration the possibility for emergencies and rainy days.

4. CHOOSE A LENDER

Now it's time for you to choose a lender. You have the option to either choose one on your own or work with a realtor or real estate agent and have them recommend you one. Most people tend to choose to work with their bank that they already have a relationship with while others allow their realtor to refer them to lenders they have a relationship with. Again, it's totally up to you, the buyer.

5. GET PRE APPROVED FOR A LOAN

Now that you've chosen a lender, it's time to get that pre approval. Often times people confuse pre qualification with a pre approval, but there is a difference. With the pre qualification, the bank is only going by your word as to how much money you make and the state of your credit. They haven't collected any solid information from you and verified it against what you've told them.

With a pre approval, the bank has collected all your information regarding your income, debts, job history as well as pull your credit scores. Then with this information, they determine how much money they're willing to loan you to get you a home.

6. FIND THE RIGHT REALTOR OR REAL ESTATE AGENT

Now that you've found your lender and got your pre approval out the way, it's time to hire you a realtor or real estate agent, You can ask some of your friends who have bought homes before who their real estate agent was and get a referral from them. Or you can simply just get on Google and search for some real estate agencies in your area and start interviewing agents to hire to find your dream home.

7. DETERMINE YOUR PRIORITES

When it comes to buying a home, you want to definitely determine your priorities. A lot of people don't even think about the things their homes lack until they've already signed the dotted line and moved into their homes. This is why I advise all my clients to create a "must-have" list so that way when searching for a home, these are the things that we focus on and make sure the home has. Things you just cannot live in your house without. **see examples on the picture above**

8. START HOUSE HUNTING

In my opinion, this is the most fun part of the home buying process, actually house hunting. BUT, for some home buyers, it can actually be frustrating, especially in our current market. It's fun for me because I get to assist my clients with finding their dream home and actually taking them to see them and visualize themselves in the home.

The frustrating side of this can be that when we find the absolute home of your dreams, we may or may not have our offer accepted and end up back at square one, searching.

9. MAKE AN OFFER

Once you find the home of your dreams, it's time to make an offer to the seller and hope they accept. In my opinion, this is where you get to see how well your realtor or real estate agent knows the art of negotiation.

10. GET A HOME INSPECTION

Now that we've made an offer and it has been accepted, it's time to have the home inspected to make sure that it's in "move in ready" condition and that the home isn't a beautiful Money Pit. If you haven't seen the movie, Money Pit, you might want to see it. This couple got tricked into buying this home that was seemingly beautiful on the surface, but it was rotten to the core on the inside.

Peep the trailer below just for kicks:

This is why an inspection is extremely important.

11. GET HOME APPRAISED

After you've had the inspection done, it's time to get the home appraised. Again, this is one of those things that first time home buyers get confused and think that a home inspection and appraisal are one in the same.

A home inspection is evaluating the structure and stability of the home while on the other hand the appraisal has to do with the value of the home. When a home is listed at the sale price, you have to get an appraisal done to make sure the price the home is selling for is how much it's really worth. Kinda like when you're looking to get a car and see it's being sold for $15,499 and the Kelly Blue Book Value says the car is only worth $10,500.

12. CLOSE ON YOUR HOME

When you're buying a home, nothing sounds sweeter than those three magic words CLEAR TO CLOSE!!! This means you've reached the finish line and you're only a few signatures away from owning your new home. Yes, it's time to sign your life away for the next 15 to 30 years depending on how long you planned on taking to pay off your home loan.

Well I really hope this post cleared up any questions you have about the home buying process. If not, as always feel free to contact me on the contact form, book a buyer consultation or call my phone.

Happy House Hunting!!!