Tag: homebuyer

Buying a home is a multi-step process that can be complicated, particularly for first-time buyers. It is crucial to be aware of each step, as competition can be steep: one misstep and the keys to a dream home could go to another family. Read on to discover the best path to acquire one of the greatest investments to date.

Step No. 1: Decide on a REALTOR®

A real estate agent and a REALTOR® are different.  While both must be licensed to sell real estate, a REALTOR® goes through numerous background checks and must follow a strict code of ethics, which is consistently enforced by local real estate boards. Another distinction between a real estate agent and a REALTOR® is that a REALTOR® is a member of the National Association of REALTORS®. Ask for referrals and read online reviews/testimonials. Interview multiple agents to find the right one. Look for agents who have realistic expectations and are experts in desired neighborhoods.

Step No. 2: Get finances in order

A three-digit credit score and credit report tell financial stories more than bank accounts do. Everyone must carry debt in some form, and the process of paying it can span a lifetime. Paying cash for everything results in a lower score than responsibly carrying debt. A steady job and income can bypass a bad score if prospective clients are willing to put down 10-20 percent. To improve scores, future homeowners should pay all bills on time. A single missed payment can stay on credit reports for seven years, with recent delinquencies impacting scores the most negatively. Additionally, credit limits should not be exceeded, and balances should be kept below 30 percent of the credit limit.

Step No. 3: Apply for pre-approval

A pre-approval letter is a statement from a lender demonstrating that one is a qualified buyer who sellers will take seriously once ready to make an offer. Unless one plans on paying cash, a mortgage pre-approval is a good idea before beginning the home-buying process.

Step No. 4: Know the difference between wants and needs

Real estate agent will not know where to begin if a prospective client does not. Start thinking about must-haves. They can range from location to the number of bedrooms. Wants can include a pool or a guest home. Compromises are the things one is willing to exchange for needs. For example, a great school district can be attainable if the number of bedrooms is reduced.

Step No. 5: Begin the home search

Open houses will become a favorite activity when a real estate agent begins showing homes that fit criteria. This is a fact-finding mission. Take notes and jot down ideas about what is liked and not liked. This will streamline the process and give real estate agents all they need to know to make a happy homeowner.

Step No. 6: Check off mortgage approval

An accepted offer will begin the closing stage of the home-buying process. A lender will give the final approval for the purchase and specify the closing date. This is not the time to celebrate by splurging on big ticket items. Unexpected expenses can show up without warning. Paying property taxes or insurance for the first full year on the closing date might be a noted point.

Step No. 7: Get a home inspection

A good home inspector will audit the house from top to bottom, literally. They will look at the basement and the roof and everything in between, including the heating system, plumbing and windows.  Given that purchasing a home is likely one of the largest investments a person will make, don’t skip this critical step.  If repairs are necessary, this can be negotiated with the seller before the final sale.

Step No. 8: Prepare to close

Once at the final step in the process, one can pat themselves on the back for a job well done. The closing table is the desired location where the deed will be transferred from the seller to the buyer. John Hancocks should be ready because there could be hours of paperwork. An attorney or settlement agent will most likely be present.

May your new home be the happiest one on the block.