Woo hoo! You have made the life altering decision to purchase your first home! Before you break out the bubbly to celebrate your own awesomeness, let's take a look at the step by step process of buying your first home.
Step #1
Start by talking with a loan officer. Choose a lender with the heart of a teacher that can help you step by step and explain the process in a clear and concise manner. When evaluating the amount of money you can afford to borrow for your purchase the loan officer will look at your credit score, income, debt, savings and other assets. By talking to a lender early in the process, if there is anything that could prevent you from getting a loan, such as poor credit or too much debt, you can come up with a plan to get you ready to buy your first home.
It is important during this initial step that you look at affordability making sure that you can comfortably make the payments and all other expenses related to home ownership and still be able to afford the rest of your life!
Step #2
Hire a real estate agent to represent you in the transaction. The great news is that having a buyer's agent is absolutely free for the buyer as the seller pays all of the commissions. Look for an agent you are compatible with and someone who is willing and able to spend the time walking you through the process. You also want an agent that is knowledgeable about the market and is a strong negotiator.
Step #3
Choose a location. The location you buy in has everything to do with your lifestyle. If you get a lot more house in a location that requires you to commute an hour and a half to work, you will not be happy in the long run. Some things to consider when looking at location are:
Proximity to work, school & church
major roads, transportation
amenities such as parks, trails, pools etc.
Safety and security
Resale value
Step #4
Understand your needs vs. your desires. Here is the truth. Most people cannot afford everything they want. We watch television shows that show us amazing homes at a low price and we have that picture in our mind when we go shopping. Then we
are disappointed when we realize a house costs a lot less in Waco, TX
than a similar property in Atlanta, not to mention none of the cute
decorations are going to come with any house we buy. So the only
thing to do is to get real about the cost of properties in your area and
make a list of the things you really need, then prioritize your wants.
No house is perfect- not even a brand new one! The cool thing is you
are free to make improvements over time.
Step #5
Go shopping! Finally, the fun part! View properties critically. Understand that no home is perfect and many things are fixable. Make sure you keep your needs, location and budget top of mind as you view homes and avoid viewing home that are out of you price range.
In 2020, since we are in the midst of the Corona Virus pandemic there are safety precautions to be aware of while viewing homes. Masks are generally required. Most home sellers require an appointment and limit the amount of people in the home as possible. hand sanitizer and gloves are also an important precaution to keep in mind. You should also social distance, bring only the decision makers to viewings and drive separately from your agent.
Step #6
Make an offer. Look at the comparable home sales in the area with your agent to make sure you are putting in an appropriate offer. Once the offer is made, negotiated and accepted you have a binding contract. The first 7-10 days of that contact is a period called due diligence where you get your loan officer to start the process for the loan on the property and have the home inspection. Other steps that happen between the time you have an accepted offer and the closing of the sale include an appraisal from the lender, loan approval, title work from the attorney and preparing for the move. For all of the steps between contract to close check out this BLOG POST.
Step #7
Closing day! A couple of days before you head to the attorney's office you will get a clear to close notice from the attorney and lender. At the closing table you will sign all of your loan documents and get the keys to your new home!