Here are our time-tested steps for buying a home.
- Should you buy a home at all?
Buying a home is not for everyone. You may be better off improving your current home or stay in a rental. If worrying about home maintenance and mortgage payments will keep you awake every night, just renting a home may be the best for you. Also, if you love your current neighbors and neighborhood, improving your current home may be best for you and your family.
Many believe that it is too early to call a Realtor at this preliminary stage – they would be wrong. We advice people all the time on what there needs are and on how to achieve their goals. After looking at all the options and getting our input, our clients come away feeling great about their decision – whatever that may be.
- How Much Home Can You Afford?
After deciding that purchasing a home is right for you, the first step in a home search would typically be to contact a reputable lender. We work with reputable lenders and will be happy to share our experiences with you. Based on your circumstance, one lender may be better than another. Often buyers have a Credit Union or lender they already are familiar with. Regardless of whom you choose, your choices in regards to type of loan, down payment and loan amount will influence everything that follows and we will be there to guide you.
Keep in mind that the lowest rate published on a lenders website or radio commercial may not be available to you or may have other costs associated with it. To reduce the risk of last minute surprises – work with a reputable local lender.
- Assess Your Needs – Plan For Success
Now it is time to meet face-to-face. An obvious place to start is to go through your needs and wants. What is important to you and your family? How important are schools, commute, home features, feeling of the community? Do you need garage parking, hate stairs, need an in-law suite, a fenced backyard?At this point we will also discuss and sign a buyer agreement that outlines what we expect from each other. It will allow us to dedicate time to your home search and will also clearly spell out your rights and our fiduciary duty you. See our more in-depth article on buyer agency .Planning the move at this point may seem premature but we need to lay out a realistic timeline up front. Moving into a new home is very exciting – but can also be a very stressful experience. There are many ways to reduce this stress by planning the purchasing process carefully. Timing is important and we will talk through the various options when it comes to closing time-frame, rent-back possibilities and so on
Keep an open mind. Your priorities may change as we move through the process of finding a home. What seemed like an unlikely choice when we started out may end up being the dream home you never knew you wanted by the time we have finished!
- Starting The Search
When we start out to look at homes you may have an idea as to what you want. It may be the school, the specific location or similar. You probably have been to some open houses and search online to see what is available. We have obviously helped many purchasers find their new home in the area. Based on our experience and your needs we will do some initial searches and showings to get a better idea as to what you are looking for. During the home search phase we will keep track of prospective homes and the homes viewed through Email+. Watch the short video to the right to see how easy it is to use.
While you may feel able to find homes online yourself, please be open to our suggestions of homes to look at as well. Based on experience we do know what communities and areas are comparable to others and seeing a home outside your initial comfort zone may expose you to some great communities you never knew existed.
- Narrowing The Focus
As we see more and more homes and areas, you will start to get a good idea as to what is available in what location and at what price. This realization will firm up the priorities and focus the search towards a few select locations and communities.When we get to this point we are getting ready to make an offer. You may check your email continuously and anxiously be waiting for a new home to be listed on your favorite street. At this point we will set up immediate email alerts – you will get emailed right away when something is listed.No matter the market – well priced homes in a good condition will sell quickly so it is important to be ready to act fast.Also, as we are ready to purchase we will look for unlisted homes, for sale by owners and so on at this point.
Keep in contact with the lender regularly and obtain updated loan approval letters every now and then. Also, if there are any changes in your financial situation make sure to speak to your lender about it. Also – do not purchase a new car or open any lines of credit at this point…
- Making the Offer (and getting it accepted)
When the right home presents itself you will be ready to make an offer. We will have already explained about home inspections, financing and appraisal contingencies, earnest money deposits and so on. We provide you with sold comparables and pricing history, apply that to the specific home and discuss various offer strategies.Based on the knowledge of the market and the process, you will be informed and confident when preparing a strong and irresistible offer to the seller.Negotiating a real estate purchase is about realizing what is important to both sides of a deal. We are not looking for a win-win – we represent you the purchaser and our job is to get you the best price and terms possible. While terms may be important, the negotiations usually hinges on agreeing on the price in one form or another.
Making a realistic first offer may get you the home cheaper in the end. By low-balling off the bat you will in some cases put off the seller or invite more back and forth negotiations driving up the price. In some cases – make a reasonable first offer close enough to the sellers bottom line. The seller may not want to take the risk of countering.
- Bringing it Home
Between the contract signing and closing date a flurry of activities will take place. You will have many deadlines and contingencies to worry about so we will keep you appraised throughout the process with status updates and to-do lists to keep everything on track.You may want to compare a few lenders and lock your interest rate, the appraisal and home inspection will take place and you likely also will receive community documents to review for rules and regulations that pertains to the home.You will be obtaining insurance and may also need to look into things like septic, RPA’s, building permits, flood zones and so on. At his stage you will typically still have multiple points where a renegotiation of the contract is possible.And we didn’t even deal with the packing, moving and preparation of the new home.
If you are selling and purchasing at the same time, we have a great strategy that will allow you to stay for a while in your old home even after it is sold for a limited time. This allows you to make sure your old home is sold before purchasing the new one and also gives you more time to move.
- Closing The Deal
Until everyone has signed on the dotted line the home is not yours. The last few days can be emotionally taxing as surprises sometimes to pop up at that time. Most can be avoided through being proactive and inqusistive earlier in the process, however things do happen from time to time. Typical issues would be changes to the condition of the home (new water leaks), loan changes or last minute title issues (unreleased liens, survey encroachements or easements) or contract breaches (forgotten promised repairs etc.)Having an experienced professional on your side at that time can make an otherwise dealbreaker seem like a small bump in the road.
Work on getting the HUD-1 as early as possible to review loan charges. Also, makes sure the survey and title work is completed early so there is time to resolve any issues.
- Your Realtor For Life
After settlement you may still need help tying up loose ends. We work with all types of contractors and can recommend dependable and reasonably priced ones. As we own and operate a separate property management company, we are well aware of how to deal with various maintenance issues and contractors.Most of our business is repeat business, and we keep in touch with our clients regularly to see how they are doing. We also learn a great deal from their homeowner experience.