The Home-Buying Process in 10 Simple Steps
Wouldn’t it be great if buying a home were as simple as playing a board game like Monopoly? All you’d have to do is find a desirable neighborhood, hand the bank a few bucks, and get your house. Of course, the home-buying process is more complicated in real life. We have put together the following list to help you anticipate some important steps.
Step No. 1: Chose an agent. The first step in the home-buying process is to find an agent you feel comfortable working with on what will likely be the largest financial decision of your life. Each of the brokers at Newcastle Realty are a great choice—they are efficient and professional, and can help with your search and help get you to closing.
Step No. 2: Find a lender. Once you’ve chosen a real estate agent you trust to be your advocate, ask him or her to recommend lenders. Choosing someone to handle the financial part of the home-buying process can feel like a scary step, but choosing a lender that’s competitive on rates, communicative, and available is key. Our agents work with several local and regional banks, and can offer you recommendations and contact info.
Step No. 3: Clean up your credit Now that you have a great agent and lender, you can ask for guidance on any credit score issues you may be facing. Whether it’s a small or large problem, the lender can provide guidance to help repair your situation and make sure you’ll be approved for a loan.
Step No. 4: Apply for mortgage pre-approval. A lender will help you determine exactly what you can afford and, therefore, which houses you should be considering. To arrive at a purchase price, you’ll factor in expenses like homeowner’s insurance, association dues, and utilities to make sure you can comfortably make your mortgage payments. The lender will then identify the total amount of money it’s willing to lend you.“Having a pre-approval letter in hand when you’re ready to purchase a home adds strength to your offer, which can be an important advantage in a competitive home-buying market,” says Lorrie Zeiner, a top-producing broker at Newcastle Realty.
Step No. 5: Create a home wish list. Once you know what your purchasing power is, talk with your real estate agent about your ideal home. Come up with a few “musts,” as well as “wants” you’d ultimately be willing to compromise on. Think bigger than just the color of the kitchen or the floor plan, advises Zeiner. For instance, do you want to be within walking distance of restaurants? Do you want space between you and your neighbors? Or is proximity to a good school the most important factor?
Step No. 6: Search the listings. Now comes the fun part: searching for homes that meet your parameters. Visit Newcastle Realty’s award-winning website for a smooth online real estate search experience. When you begin touring homes that are on your short list, take along a notepad and jot down your thoughts as you approach each home. Can you imagine yourself living there? “Peruse them and make note of what you like about each home,” says Zeiner.
Step No. 7: Make an offer. Your real estate agent will walk you through the steps required to make an offer on a home in your area. “Your offer will likely include earnest money that will apply toward your down payment on the home and may include contingencies such as hiring a home inspector,” says Dennis Hilton, owner of Newcastle Realty. Expect some negotiation, and discuss a competitive offer with your agent.
Step No. 8: Get final mortgage approval. Once your offer to purchase is accepted, you’ll work with your lender to get final approval for your home purchase by the date specified for the closing. The lender may require you to pay property taxes or homeowners insurance for the first year at the time of closing, so make sure you know what funds will be expected. “Don’t make any major purchases like that big-screen TV or riding lawn mower until after closing, especially if you’d be using credit, as that can affect your mortgage qualification,” says Hilton.
Step No. 9: Do your due diligence. The due diligence process usually includes getting a home inspection to make sure you haven’t missed any hidden problems on your walk-throughs. If issues are found, consult with your agent about options. Those could include asking the current owner to fix them or take the cost of repair off the closing costs.
Step No. 10: Attend the closing. Once all of the above steps are completed, you’ll be on your way to the closing table. This is when the deed to the home is transferred from the seller to the buyer. Every transaction varies, but plan to sign a lot of paperwork. An attorney or settlement agent will guide you through the process. Then you’ll officially be a homeowner and receive the keys to your new home. Congrats!