1. Should I buy?

There may be many reasons for you to buy a home, creating equity and generating money in the process may be the first reason. This the biggest investment for most people will ever make in their lifetime, buying a house unknowingly makes you an investor. But, an educated buyer owns it as an prized investment. There are many reasons to support your decision to buy a home, among these, equity growth, overtime appreciation of the property value and tax benefits might be some of them.

An educated buyer bases his/her decision to buy on facts, not fears. Few of the questions that you might have 
  1. Can I afford to buy? Answer: If you are paying rent, you very likely can afford to buy

  2. Is this the right time to buy? Answer: Finding the right home is the key. Find a great buy now and make sure you can financially afford to hold it for long term.

  3. I do not have enough money saved for the down payment! Down payment doesn’t prevent you from making your first home purchase.

  4. I do not have a perfect credit score! A less-than-perfect credit score not something that would necessarily stop you from buying a home.

  5. I can't imagine that I can ever buy my dream home! Buying your first home will bring you closer to buying your ultimate dream home.

  6. Educating yourself and creating a right team of professionals makes buying your first home easy and stress free.

 

2. Hiring a real estate professional?

Before you hire an agent you need to know what the agent is going to bring to the table for you. There are several roles that an agent performs from first contact by you, to the close of transaction.

Some of the roles of your real estate professional

A real estate professional would:

Educates you about the current market condition.

  1. Educates you about the current market condition.

  2. Work with you on your wants and needs.

  3. Show you the homes that fit your criteria.

  4. Coordinates with other professionals that are involved in the process of you buying your home. Typically following are involved in the transaction - loan officer/broker, listing agent, escrow officer, inspector, appraiser, contractor(s), home insurance agent/broker and a home warranty company.

  5. Negotiates on your behalf.

  6. Time is of the essence in the transaction and a professional will keep on top of paperwork and deadlines making sure everything is done on time and correctly.

  7. Handles any problems that may arise with utmost professionalism.

Important questions to ask your agent

Qualifications are important. However, finding a solid, professional agent means getting beyond the resume, and into what makes an agent effective. Use the following questions as your starting point in hiring your licensed, professional real estate agent:

  1. What made you choose a selling real estate as a profession?

  2. Why should I work with you as a real estate professional?

  3. How and what do you do better than other real estate agents?

  4. What are some mistakes that you think people make when buying their first home?

  5. What are the most common things that go wrong in a transaction and how would you handle them?

  6. What processes will you use to help me find the right home for my particular needs and wants avoid common mistakes that buyers end up doing?

  7. What other professionals do you suggest we work with and what are their credentials?

  8. I would like you provide me with references or testimonials from past clients?

 

3. Securing financing.

Thought of home ownership is exciting and thrilling, but the thought of taking on a mortgage may be over whelming and chilling. Many first-time buyers start out unaware of the process or nervous about making such a one of the largest financial commitment of their lifetime.

From start to finish, you will follow a six-step, easy-to-understand process to securing the financing for your first home.

Steps for obtaining Financing for a Home

  1. Choose a mortgage specialist.

  2. Make a loan application and get pre - qualification.

  3. Review different loan programs and crunch some numbers to determine what fits the financial goals.

  4. Share accepted purchase offer contract with the loan officer to be submitted to the lender.

  5. Loan officer/lender will order an appraisal and Escrow/Title company will generate title commitment for the property.

  6. Lender will fund the loan at closing.

 

4. Finding the right home for you.

Shopping for homes may seem like getting in the car and driving all over town. It’s true that hopping in the car to go look is probably the first part of the home-buying process. However, the excitement of checking out may run out pretty fast as days turns to weeks and sometimes weeks to months and you may be still going around looking at properties. For this reason we say that looking for your home begins with carefully assessing your needs, wants, and wishlist, for the short and long terms whether you are buying the property for investment or to live in, whether this is your first or retirement home.

You should always as few of these questions to yourself

  1. What do I want to be close to?

  2. How big of a house do I need and why?

  3. I am willing to do some TLC or I am up for a serious fixer-upper?

  4. What is important in convenience of location, plan, size and/or home value appreciation?

  5. Is neighborhood stability important?

  6. Do I want to live in a HOA?

  7. Would I it be a good idea to look into buying a condo or single family home is critical to my needs?

  8. Would new home construction be of any interest to me?

  9. Finally create a cheat sheet with three columns Needs, Wants and Wishlist. Needs which you can not compromise on. Wants which it would be nice if the house has them. Wishlist is something that would be really lucky to find in the grand scheme.

 
5. Making an offer.

Once you narrowed down the list to the house you like, its time to make an offer. The reality of writing an offer hits home. This is the most important time that you need to think like a business person. You need to handle the process with a cool head and a clear realistic view of your market values. The three basic components of an offer are price, terms, and contingencies (or “conditions”).

Your offer must represent fair market value of the home you want to buy. Your agent’s market research will help you make this decision.

Some of the Terms in a real estate offer are

  1. Schedule of various events that has to happen before closing.

  2. Conveyances - The items that stay with the house when the sellers leave. Defining real property or personal property, which can be bought and negotiated in separate bill of sale.

  3. Closing costs - It’s customary for buyers to pay their closing costs, but if you want to roll the costs into the loan, you need to write that into the contract. You may ask the seller to pay for some of the buyer's closing cost.

  4. Home warranty - This covers repairs or replacement of appliances and major systems. You may ask the seller to pay for the home warranty.

  5. Earnest money – Once the offer is accepted and both seller and buyer are under legally biding contract. Buyer deposits earnest money in escrow account. This protects the sellers from the possibility of your unexpectedly breaching the contract and makes a statement about how serious of your offer is.


6. Perform due diligence.

Once you buy a home, it is yours good or bad you can’t return it if something breaks or isn’t quite the way you expected it to be. This is why home owner’s insurance and property inspections are so important.

A home owner’s insurance policy protects you in two ways:

  1. Against damage or loss of the property itself.

  2. Liability in case someone gets injured while on your property.

The property inspection is something you should never waive. The inspection is done by a state licensed inspector and it uncovers and exposes the hidden issues in a property that might be hidden to an untrained eye. This will let you know exactly what you’re buying before you sign your closing papers. Here you will have a chance to back out if something is not to your satisfaction. This has to be done during the inspection period.

  • Your major concern are HOA CcnRs, structural and roof integrity.

  • The small things are easily fixed.

  • If in your inspection report there is something of concern, you should bring in a specialist and further evaluate. If the condition(s) turns out to be really expensive or unacceptable to you, you may want to walk away from the purchase and still get the earnest money refunded.

 
7. Close of escrow.

Once lender confirms a survey, appraisal, title search, and a final check of your credit and finance are acceptable it is time for the loan to be approved and by an under-writer to finally fund the loan. Your agent will keep you posted on how the final stage is progressing.

You just have a few pre-closing responsibilities:

  1. Keep your finances in control and steady.

  2. Communication at this point is utmost important to make sure paperwork work is done promptly.

  3. Communicate with your agent at least twice a week.

  4. Several days before closing setup appointment with escrow officer, to sign the loan documents, confirm with your agent that all your documentation is in place and in order.

  5. Conduct final walk – through, remember your agent can not do this for you.

  6. Bring certified funds for closing at the time of signing the documents or wire the funds directly to escrow account.

On closing day or ideally few days before closing, with the guidance of an escrow officer and your agent, you’ll sign documents. Closing will happen on the day set in the purchase contract, which is also called close of escrow. Once the mortgage is recorded as a public record at the county recorder's office you have closed escrow of closed on the property. Once this is confirmed by the escrow officer your agent will get you the keys to the property and finally it is yours.

As long as you have clear and realistic expectations and follow directions, closing should be a stress free and exciting time and commencement of your life as proud home owner.


8. Protect your investment.

From start to end of your home buying experience, you would have spent a lot of time with your real estate professional and you would have gotten to know each other well. This not end to all the trust and rapport created with each other, just because the deal has closed. A true professional would want to keep in touch.

After you close on your house, you agent will still help you in

  1. Find contractors to help with home maintenance or remodeling.

  2. Help your friends find homes.

  3. Keep you posted of your home’s current market value.