STEP 1: DECIDING TO BUY
Buying your first home is a major decision, but can be one of the best decisions you will ever make. It is also one of the largest financial and emotional investments you will ever make. The biggest initial questions are “can I afford to buy?” and “when is the right time?”
Tips to helping you decide:
▶ If you are paying rent, there is a good chance you can afford to buy.
▶ The right market is always now. The right house depends on you, not the market, so finding your house and making sure you can afford it is the right market.
▶ The amount of your down payment does not prevent you from buying your first home, nor does your credit score; perfect credit may help in how much you can borrow, but it doesn’t mean that you can’t borrow.
▶ Buying your first home now is the best way to get closer to buying your ultimate dream home.
▶ Buying a home doesn’t have to be complicated and you don’t have to be the knowledge keeper. At Rock River Realty, our agents will help you through the process and answer any questions that you have.
STEP 2: CHOOSE YOUR AGENT
The best agents listen to their client’s needs, review their financial abilities and help them find their dream home. Great agents understand that this is your dream and they are there to help you fulfill it.
Your real estate agent should:
▶ Inform you about the markets you are interested in.
▶ Listen to your wants and needs and consult with you in order to find a home that meets your criteria.
▶ Coordinate inspections, closings and any other work on your behalf.
▶ Negotiate with the seller.
▶ Review and re-review paperwork and deadlines.
▶ Problem solve any unforeseen and foreseen issues on your behalf.
STEP 3: ESTABLISH FINANCING
Your lender will pre-approve you for a certain amount you can borrow, but it is up to you to decide how much you are comfortable paying every month. The lender only sees your finances on paper, so remember the choice is yours as to how willing you are to stretch your budget for your dream home.
The financing process:
▶ Find the lender that fits your needs.
▶ Complete the loan application and get pre-approved.
▶ Determine what you can afford and choose the loan product that is right for you.
▶ Present your lender the accepted purchase offer contract.
▶ Obtain property appraisal and title commitment.
▶ Acquire proper funding at the closing.
STEP 4: FIND YOUR DREAM HOME
Congrats! You are now pre-approved and ready to start the search for your dream home. But now what? There are a lot of homes out there and jumping in without help can get intimidating and overwhelming fast. This is when the agent you chose becomes a mentor and consultant. Your agent will be able to help you find homes that fit your needs.
Qualifying questions to help you choose your home:
▶ What do I want my home to be close to? (Family, work, night life, etc.)
▶ How much space do I need and why?
▶ Which is most important to me—the size or the location?
▶ Do I want a fixer-upper?
▶ Is home value appreciation important to me?
▶ Is a condo a viable option?
▶ What amenities do I want and which ones do I really need?
STEP 5: MAKING AN OFFER
You’ve found your dream home, so now it’s time to make a convincing offer. Your home is an investment. Tough you may love a house, it’s imperative that your agent researches the market to make sure that you are getting the house at a fair price and that you dream home doesn’t turn into a nightmare in the future. Count on your agent to inform you and walk you through the offer.
Understanding the offer sheet:
▶ Price: The dollar amount you ready, willing and able to pay for the house
▶ Terms: The factors (financial and timing) included in the offer. (Closing dates, repairs, etc.)
▶ Contingencies: Clauses that let you out of the contract if problems exist that you were not aware of the time of agreement. They also specify any occurrence that has to happen for you to fulfill the contract.
STEP 6: PERFORM AN INSPECTION
No home is perfect and in this phase tuning out the emotional aspects of buying is important. Having the property inspected will expose any hidden issues and you will know exactly what you are buying before closing.
Tips to understanding the inspection:
▶ In the inspection process the main focus is structural damage that can occur because of poor construction, shifting soil and water damage.
▶ It’s the inspector’s responsibility to include everything they find that is not up to par, no matter how big or small. The inspector’s report can be extensive, but a lot of the items can be fixed easily so do not be discouraged.
▶ Big problems on the inspection report do not always mean that you should walk away. It’s best to first bring in a specialist to determine the feasibility of fixing the issue. If the issue cannot be fixed, it may be best to terminate the purchase.
STEP 7: THE CLOSING
This is it! You’ve rounded third and you are heading for home plate. You’ve made your offer and the seller’s have accepted it. You’ve had the home inspected and negotiated the terms. To keep you from putting your closing date and mortgage loan in jeopardy there are some pre-closing responsibilities that you need to know.
▶ Don’t make any major purchases during the home buying process without first talking to your lender. Big purchases can change your credit score and your debt to income ratio. It’s best to wait until after you’ve obtained the funding and closed.
▶ Be easily accessible to the lender and agent. You may need to complete paperwork or answer a quick question. If you can’t be reached a minor issue can significantly delay the closing process.
▶ Have a final walkthrough of the house with your agent.
▶ Confirm with your agent, home insurance agent/ broker, and lender that you have the settlement statement, certified funds, and evidence of insurance ready prior to the closing.
STEP 8: GUARD YOUR INVESTMENT
The home-buying process is finished, but now it’s time to implement a maintenance plan. Home maintenance is now your responsibility, and it’s in your best interest financially as it will protect your investment now and in the future. Taking care of the routine maintenance on your home’s systems is always more affordable than fixing the big problems later. Keep an eye out for signs of damage, leaks and general wear and tear. Homeowner’s insurance is also another major way to protect your investment.
Just because you’ve bought your dream home doesn’t mean the relationship with your agent is over. Your agent can help you with tax information, provide you with local contractors, landscapers and general repair services, and not to mention keep you updated on your home’s market value. At Rock River Realty we view our clients as friends. We don’t believe that our only responsibility is getting you in a house, but it’s also to assist in any way we can.