It seems obvious, but it's good to note that the first step to buying a house is making the decision to buy. Consider the reasons you want a new house and write them down. Determine how long you want to live in the new house - does buying still make good financial sense? Can you afford a house that will meet your list of requirements? A good rule of thumb is your mortgage payment should not exceed 1/3 of your net monthly income. You will be more comfortable with your purchase if you keep the cost to 1/4 of your net income. Remember, you still will want to furnish the home, take vacations and holidays, eat out on regular basis, party with friends and family. Just because a lender tells you you can afford X payments, you will be much happier with lower payments.
Step 2 - Seek A Professional
First find an agent who specializes in representing "BUYERS", not sellers. If an agent has a long list of listings, then they probably are "listing" agents and for the most part, represent sellers. I much prefer buyers and I'd like to schedule a time to meet with you to discuss your home buying plans. We'll talk about neighborhoods, schools, economic factors liable to affect the market today and tomorrow, as well as how you would like your house and neighborhood to grow with you.
At this time, I will also help you get pre-qualified for a mortgage loan, if you have not already done so. Pre-qualification is a written statement from a loan officer indicating his or her opinion that you will be approved for a mortgage loan up to a certain amount. The fact that you are pre-qualified will help us when we are negotiating the price and terms of your home.
Step 3 - Begin the Hunt
After our initial meeting, I'll search all my resources for houses on the market that fit your criteria. I'll send you an e-mail of all the listings that fit your criteria so you can look them over and discuss them in the privacy of your own living room. You can send me a list of the homes that you prefer and I'll preview these houses to eliminate the obvious duds. Then, I'll schedule appointments for us to tour the houses at times convenient to you.
As we tour houses, I'll point out, and give you my opinion on the positive and negative features. I'll ask you what you like and what you don't like. You'll probably amend your "wish list" as we tour houses, some things will become more important and others less important. If your "Dream Home" is not in this first group, then I will use this new information to refine our search criteria to narrow in on the houses that offer the best chance of being your dream home.
Step 4 - Know the Market
My knowledge of the local market is an essential factor in the house search. I'll let you know when the market in a particular neighborhood is "hot" and when the market is "cool". This allows you to decide how quickly you need to act.
As we tour houses, I'll let you know when I feel the asking price has negotiating room and when the house is "priced to sell". My unique market knowledge will keep you a step ahead of the "house hunting competition".
During a "buyer's market", which exist right now, there are more houses for sale than buyers. This gives us more negotiating room as houses are taking much longer to sell.
Step 5 - Find Your Dream House
I'm confident we'll find your dream house. When we do, I'll put together the purchase offer tailored for your needs including appropriate contingencies (such as obtaining financing, favorable home inspection, clear title, termite inspection, etc.).
The offer will be presented with "earnest money". This is a cash deposit made by the buyer to a home seller to show good faith in buying the property. The earnest money is "YOUR" money and is applied to closing costs or any other money owed at closing. You can only lose your earnest money by backing out of the deal for no good reason. If the seller accepts the offer, we will work on any contingencies and generally closing is held within 30 days from the offer date (dependent on the turn around time of your mortgage financing).
Step 6 - Negotiate the Deal
It is not uncommon to receive a counter offer when the initial purchase offer is submitted. Don't let this discourage you as I have never had my original offer accepted. I will get you the very lowest price on this particular home. We will discuss the counter offer and you will decide whether or not to accept the counter offer, submit your own counter offer, or reject the counter offer and move on.
Market conditions will play a role in how aggressively we can negotiate the deal. We will also work within your limits. Emotions can lead to buyer's remorse. It is better to set limits prior to negotiating an offer and stick to these limits.
Step 7 - Get a Loan
During the "looking" period, you will be working with several mortgage lenders to determine which lender has the best deal for you. We will request what is called a "Good Faith Estimate" from each lender so we can compare their cost and see who has the best deal for you. You should "shop" for a mortgage the same way you shop for a car or a home, always looking for the best deal you can get. Since you are pre-qualified for the loan before starting your home search, you will be that much closer to the end. Once we decide which lender you will use I'll gather the necessary property information your lender will need to close the loan.
Step 8 - Close the Deal
You will receive a "Good Faith Estimate" of closing costs at the time the loan application is submitted to the lender. The estimate is based on the loan officer's past experience and may not include all the closing costs. I will be glad to review the "Good Faith Estimate," answer questions and highlight any missing costs or over estimates. You need to know what your true cost are going to be. Once satisfied with the lender you will make a "formal" application and we will be on our way to closing.
Step 9 - Move In
Congratulations! You've bought your dream home! It's time to move into your new house and make it your home. Enjoy this exciting time. I'll give you a checklist to help you remember the numerous details that will make your moving day a pleasure.
