Buying your first home can be a daunting task. In fact, every time you buy a home it can be overwhelming when you consider all the variables that can come into play. We thought it was necessary to give you a rundown of exactly what to do during that purchase process. The main reason is that the country right now is experiencing a huge influx of homes bought by first-time buyers. Here is a step by step process on what to do in:
1. What is your payment threshold? Initially, you should determine how much you are comfortable paying on a monthly basis for your new home. In many cases, buyers often qualify for more than they are willing to pay. What is that number? No one wants to be “house poor” and eat ramen noodles most of the week. Take a look at your monthly budget and find out what your comfort level is. Don’t compromise this at all! Don’t let the pressure of the dock, your loan officer, your real estate agent or your friends influence you to get too leveraged. They don’t pay their bills.
2. get graded. If you’ve heard the news in the last few months, you know that the mortgage industry has been through a real “elimination” process. Your mortgage company’s decision can mean the difference between a completely smooth transaction and a complete nightmare. First of all, I think a buyer should choose a solid local mortgage company. He not only needs to choose a legitimate mortgage company, but he also needs to choose the right loan officer. The loan officer runs the program in that regard and if they leave your file on his desk until a few days before closing, he’s in trouble. If he doesn’t know what to do, consider asking your real estate agent for his opinion. Your real estate agent also has a stake in the transaction and doesn’t want you in any trouble either. Well, once you’ve found who you want to work with, you need to get pre-qualified. The loan officer will want to get your employment history, credit score, debt-to-income ratio, and assets. Be prepared to give them this information. The process consists of 3 steps: pre-qualified, pre-approved and approved. When you submit an offer on a home, sellers typically want to see a pre-approval letter along with the offer. You are absolutely free to look at houses before you start the mortgage process, but it’s always good to know if you qualify and for how much.
3. Find a real estate agent. In Hampton Roads there are more than 7,000 real estate agents. So who do you choose? Many times buyers find out about an agent through friends or family who have used someone in the past. However, most buyers start their search online and use an agent who gives them the most information and help. As with any industry, there will be all sorts of personality types and you should choose an agent based on one that closely resembles your own. As a buyer, you want someone looking out for your best interests to find you the best home, at the best price, and with the least amount of hassle.
Four. Search Houses. Most agents have websites you can use to search for all the available homes for sale in Hampton Roads. These sites are linked directly to the local MLS company and usually contain the most up-to-date information on new listings. With these thousands of websites, you can choose which one works best for you. After determining the price, city, neighborhood, school district, square footage, etc., you’re on your way. Just enter your search criteria and viola, all those listings will appear.
5. See houses in person. Typically, once you do your search and find some homes that interest you, you’ll want to contact the site owner to view the property in person. Most of the time, there will be a link on that list that will allow you to easily do this. This link will often be a fillable form that will immediately send an email to the site owner regarding your request. You will need to contact the agent to enter the home. Here is an important point. Always remember that there are usually two agents involved in each transaction. The sign in the yard of the property has the name of the agent representing the seller “only”. You will need a buyer’s agent who will look out for your best interests. The buyer’s agent may be from the website on which you did your initial search.
6. write an offer. Once you’ve found “the one”, you’ll need to contact your agent to write the offer. Most agents are very familiar with our contracts and can help you with all the clauses contained in them. It is important to know what rights you have as a buyer regarding contingencies, deadlines and laws. Do not let your agent go through this process. Notable terms of the “offer to purchase” include the names of both parties, the address of the property, personal assets conveyed with the property, the amount of the offer, how closing costs are addressed, deposit of collateral, type of loan, home inspection, and homeowners. information association. Security deposit is required for all buyer transactions and is considered bona fide money. If a buyer decides to withdraw from the ratified contract without legal reason, the seller would be entitled to this security deposit. On the other hand, there are several ways in which a buyer can abandon the transaction and not lose their security deposit. Be sure to check with your real estate agent. When it comes to earnest money, there are no standards, just typical occurrences. Typically in our Hampton Roads, Va area. Under a sales price of $300,000, a $500 deposit is sufficient. Above $300,000, sellers often want to see $1,000 or more. The amount of security deposit usually shows the seriousness of the buyer. As long as a buyer has not defaulted on the transaction (which is most of the time), they will be credited the security deposit at closing. Contingencies are things that have to happen for something else to happen. Common contingencies in an offer to buy are home inspection, sale of current property, and homeowners association.
7. negotiating. Most of the time, the seller will not accept your initial offer. This really falls into his real estate agent’s experience to help him get the most he can get.
8. Acceptance of the Contract. When both the seller and the buyer agree to the terms, you have a legally binding contract. At this point, all parties involved are moving toward closing under the terms of that agreement.
9. Elimination of contingencies. Once you have a ratified contract, the buyer and agent will schedule the home inspection. When the inspection is complete, the buyer will have the opportunity to request that the seller make certain repairs. In addition, at this point the seller will order the documents of the condominium or house owners association, if applicable. The buyer will have the opportunity to accept these documents. If the buyer has a house to sell first, well, he has to get down to business. This is a difficult contingency, especially in our current buyer’s market. After ratification, a termite and moisture inspection will also be ordered.
10 Complete the Mortgage Process. Finalize everything with your loan officer and get their full approval if you haven’t already. They will also need a complete copy of your contract. Your mortgage company will also order an appraisal for the home you are currently buying. The appraised value of the home must be equal to or greater than the amount of your loan or the seller will have to lower the sales price to reach the appraised value, or the buyer may back out of the contract.
eleven search title. There’s not much you can do here. Just be sure to choose your settlement company or get a recommendation from your agent. Once you have selected a settlement company, they will need a complete and legible copy of your contract.
12 To Closing. Bring your license so everyone has proof that you are who you say you are. Review the HUD Statement (a 2-page document that lists all the figures that affect your purchase) with your settlement officer to make sure everything is what you expected. In fact, you should be able to get a preliminary HUD before closing so there are no surprises. Your closing agent will be able to explain all aspects of your closing. Don’t hesitate to ask them questions. Sign all the papers. Congratulations, you are a homeowner!!