First Timers - Where to start
So… how does this whole “home buying” thing work…
There are many moving parts and factors to be aware of when considering buying a home. I would say it is always, but especially as a first time home buyer, important to have a knowledgeable Realtor to help guide you along the way.
Most people will tell you, the first step in the home buying process is to get pre-approved. However, if you don’t know a knowledgeable loan officer yourself, I’d say it is a better idea to start with a Realtor – they know things. Below walks your through the process that will get you to an accepted offer. Feel free to reach out to me with questions!
Meet with a Realtor – Whether you’re looking to buy right away, or it’s something further out on the horizon, meeting with a Realtor is the strongest place to start. As a buyer, your Realtor will be your “buyer’s agent” and they can explain the home buying process, answer any questions you have, discuss current market conditions and find out more about your needs are in a home to search more efficiently and keep you aware of new listings. As the buyer, you do not pay the commissions of the Realtor, those are paid by the seller. So there is no upfront cost to you. (A smaller $150-$300 brokerage fee that will be grouped into your closing costs is the only expense). Meeting with a Realtor is also helpful if you don’t have a loan officer. Realtors work with loan officers all the time and can be a great resource for references – we know who will take the time to work with you and who is efficient to keep things moving smoothly.
- Get Pre-Approved – Meet with a loan officer to see what you can qualify for. The loan officers can give you estimates on monthly payments and closing costs at different price points as well. This is an important step so you know what your budget is before you start searching. It’s can be very frustrating if you start looking at and loving homes only to find out later that you actually aren’t comfortable with the payments or don’t qualify – Get Pre Approved First!
- Start the Search – Your Realtor can set up searches and notify you as soon as new listings come up that fit what you’re looking for so you are ahead of the game. This is especially important now in our fast moving market; homes that are priced well can, and do, get multiple offers within a couple days. Your Realtor can set you up a portal for your search so you can log in and save favorites with the most up to date info, but if you are searching on your own, GRAR.com and Zillow are a fine starting points.
- View Homes – Pictures of a home, and actually walking through a home are 2 very different things. So, when you see a home you like, be sure to let your Realtor know so she can set up a showing for you. Waiting too long to view a property may mean you’ll miss out. You can request multiple properties to see in a day, or just 1 if a new listing catches your eye. Your Realtor generally will need 24 hours to set up showings, but could need longer or be able to move quicker, it just depends on the guidelines indicated by the seller. Each listing is different.
- Making an offer – You found The One and you’re ready to buy! However, this isn’t quite as simple as signing a one line statement saying “I will pay this much for that house.” It’s one of the biggest purchases of your life, so yes, it’s a little lengthier. To make an offer, you’ll need the following:
Counter offers: Once the buyer makes an offer, the seller’s can decline the offer, accept this offer as written, or accept the offer “as written except” and make any alterations to any portion of the purchase agreement. This is how the seller counters. (ie: if your original offer was $190,000, the counter offer may read - As written except: Purchase price to be $200,000) You then have the option to accept their counter offer, or counter back and so on.
Offer Accepted! Once the terms are agreeable to both the buyer and the seller, you’ll need to sign the Purchase Agreement again acknowledging the offer was accepted.
- Purchase Agreement – This is the 6 page offer contract with several different decisions to be made on the purchase beyond Sales Price and if the buyer wants to ask for closing costs. Other fields include if you want inspections (this answer is nearly always YES!), a survey, a home warranty, how taxes are pro-rated, if appliances or other items are included, how the home is financed, if the offer is contingent on sale of your current home, along with determining a tentative closing date and day you as the buyer will take possession. In order to make an offer, you will need to discuss the terms with your Realtor to complete and sign.
- Seller’s Disclosure: The Seller’s Disclosure is a 2 page document the Seller fills out about the house they are selling letting you know of the condition of the home to the best of their knowledge. Your Realtor will be able to provide this to you. It is helpful and necessary to look through this before writing up your offer. As the buyer, you’ll need to sign that form acknowledging you received it.
- Lead Based Paint Disclosure: The Seller also must complete the Lead Based Paint disclosure – Basically, lead based paint can potentially be hazardous and up until 1978, paint could still contain lead. This form just makes you aware, that if the house is from 1978 or older, lead based paint could be present – you’ll sign this form too. (Your Realtor will give you a safety packet of info if the home is 1978 or older.)
- EMD – Earnest Money Deposit: This is a good faith check the buyer writes ($1,000 or 1% of the home’s value, whichever is higher, is typically standard) and is included with the offer. When the offer is accepted, your Realtor deposits this check into a holding account where it will later be applied to the funds you’ll need to bring to closing. If something comes up in inspections that make you no longer want to purchase the home, you will not lose this money.
- Copy of your Pre Approval from the Bank: Seller’s want to know you are actually able to finance the offer you are making, so be sure to get a copy of that to your Realtor.
Check out the “Your Offer was Accepted! Now What??” drop down under Buyers Resources for more information on what happens next and what you’ll need to do in order to smoothly go from an accepted offer, to and moving into your home.