Follow these 10 steps when purchasing your home

Buying a home is a major milestone in life, and the process requires time and effort. Being well informed and having a great team of real estate professionals will get you successfully through the steps and into your new home.

1. Find the right real estate team
A lender and real estate agent are important partners to your home buying process. A well-informed real estate agent will guide you through the house-buying process step by step. The real estate agent that works for you during the buying process is called a buyer agent. In most transactions, you are not required to pay your buyer agent a sales commission. Their fees are covered by the seller. A good real estate agent will disclose to you upfront any costs or fees that you may be required to pay. Always ask so there are no surprises.

Real estate agents should provide you with a preferred lender list. This list should contain lenders that have a great reputation with your agent’s past buyers.

A lender should not only be knowledgeable in the lending products but should be available when you need them. Often, buyers will select a 9-to-5 lender and feel disappointed when they can’t reach them in the evening. The real estate market is competitive. Response and availability can be the difference between getting or losing the home of your dreams.

2. Get approved for your mortgage
Before you start looking for a home, you need to know how much you can and want to spend. Your lender will require some financial information from you to give you a lender letter. If you don’t qualify now, a great lender will point you in the right direction to get you approved in the near future. It’s important that your real estate agent and lender talk! Everyone must be on the same page, understanding your goals and needs. A great lender will educate you on all the products that you qualify for, including any grant or free money opportunities. Select the loan that fits your needs.

3. Set your goals based on your wants versus needs
Be sure to write down your wants and needs in a new home. There are a ton of things to consider, like water views, garages, fenced yards, fireplaces, neighborhoods, attached homes, amenities, school districts and more.

4. Shop for your home and make the offer
Your real estate agent should set you up with an inclusive home search based on your wants and needs. Often, new buyers will spend countless hours searching the internet for homes. They will fall in love online only to find out the home isn’t available or is already sold. The best way to stay ahead of the competition is to have a real estate agent that stays ahead of the competition by keeping you informed, understanding the trends in the market and knowing where to look for homes that may not be a traditional avenue.

When you find the right home, your real estate agent should guide you through the offer process by researching and giving you market information as it relates to the home and inform you on the steps to submitting your offer. Most offers require you as the buyer to offer an earnest money deposit with your offer as good faith of purchase. Typically, an earnest money deposit will range from $500 to $1,000 depending on the market.

5. Get a home inspection
All homes aren’t created equally. Once your offer is accepted, your real estate agent should assist you with setting up a home inspection. Home inspections performed by reputable companies provide an in-depth analysis of the home and can uncover items that need immediate or future attention. This could save you from purchasing a home that is in need of repairs that cost more time and effort than you’re willing to spend.

The home inspection is at the buyer’s expense and is paid for at the time of the inspection. Typical costs range from $400 to $500, depending on the market.

6. Negotiate any repairs/price reductions
If your home inspection uncovers repairs that you aren’t comfortable living with, your real estate agent should negotiate with the seller’s agent to get the repairs completed, an allowance for repairs, or a price reduction for you prior to moving forward or incurring any further expense in the transaction.

7. Appraisal time
The appraisal is performed by a third-party appraiser whom your lender hires on your behalf. The appraiser works for both you and your lender to ensure you are purchasing a home that has an overall condition that is acceptable for the mortgage product you have chosen and that you are purchasing the home at or below its market value. When a home’s value appraises for less than what you have offered, the buyer typically has three options 1) pay the difference, 2) ask the seller to reduce the price or 3) terminate the contract to purchase. Appraisals in most cases are at the buyer’s expense and payment is due before the appraisal is scheduled. Typical costs range from $475 to $550, depending on the market.

8. Paperwork, paperwork & more paperwork
When you are at the appraisal process of the loan, you are normally in the home stretch to obtaining the keys to your home. Your lender and closing agent will begin to ask you for paperwork required to get your mortgage loan package to the underwriter for final review. Some of the items may be letters of explanation, tax papers, updated paystubs, homeowner’s insurance policy, proof of debt payoff, etc.

9. Get a walk through
On closing day or a few days prior, you will walk the home one more time with your real estate agent. This is called a walk through. It serves two purposes, 1) to ensure the home is in the same condition as agreed upon and 2) to ensure any repairs requested have been done in a workable manner.

On closing day, your real estate agent will accompany you to the closing agent’s office to sign your mortgage paperwork. If your mortgage loan requires a down payment, your closing agent will give you wiring instructions. It’s always best to wire those funds at least 24 hours to the escrow account to ensure no delays in closing. At closing, you will get the keys to your new home. It’s always a good idea to be prepared to change all exterior locks on your new home after closing for safety.

10. Moving day!
Often, the number one thing people forget at closing are utilities. Some utility companies charge you less to transfer services versus installing new ones. If you didn’t take care of requesting a transfer of services or activation one day prior, make sure it’s one of the first items you do after closing. Remember to change your address at the post office, on your driver’s license and other important documents.