GUIDE TO BUYING A HOME
Buying a home usually represents your single most significant investment - and debt.
The home buying process is one of the most exciting and frequently stressful experiences you'll ever go through. It holds whether you've bought many homes or you're looking to buy your first, whether you're in the market for a new primary residence, an investment property, or that perfect vacation getaway. Today's real estate market can offer riskier opportunities than ever before. There is a multitude of factors to consider and decisions to make. When buying, it's crucial to have all the available resources necessary to make a well-informed decision. It's essential to enlist the help of a trusted real estate professional who'll be able to provide expert guidance at each step of the buying process. Finding and purchasing a home includes the following steps:
1. Define your goals, research your options, make your plans
Given that buying a home is such a big step, it's essential to educate and prepare yourself as much as possible. It means determining the reasons you're buying and what kind of home you're looking to purchase. Since buying and financing a home is closely related, it also means examining your current financial situation and projecting how much you can afford. Once you've answered these questions, even tentatively, you'll be in a better position to research housing and mortgage options and create an action plan and timelines for moving forward. Although it is possible to do this yourself, you may benefit from consulting an experienced real estate professional right from the start.
2. Contact a real estate professional
Since no two homes or transactions are alike, buying real estate is a complex matter with many factors to consider. Moreover, with all the unique opportunities and potential pitfalls of the current market, it's more important than ever to contact a real estate professional once you've decided to buy. When choosing a real estate professional to guide you through the property search, financing, negotiation, and transaction processes, you should consider their local market knowledge, experience, and track record.
3. Get pre-approved for a loan
We recommend that you get pre-approved for a loan before you start viewing homes with the serious intention of buying. The pre-approval process involves meeting with a lender and authorizing them to examine your current financial situation and credit history. The lender may provide you with a document detailing the amount you can borrow to buy a home based on this examination. Consider looking online to see what different lenders offer, or contact your local bank or credit union.
The benefits of pre-approval include:
You'll know what you are eligible to receive and be able to plan accordingly. Lenders can tell you if you qualify for special programs that will help you afford a better home (particularly if you're a first-time buyer). Real estate financing is available from many sources, and an experienced real estate professional will be able to suggest lenders with a history of offering excellent mortgage products and services.
4. View homes and select THE ONE
Simply put, the key to the home search process is knowing what you're looking to purchase. Among other things, that means distinguishing between "must-haves" and "like-to-haves." That said, here are a few recent facts about the search process that might put your experience in perspective: 92% of buyers use the internet or mobile apps to search for homes. The typical buyer searches for 12 weeks and views 12 houses; 97% of buyers view real estate agents as necessary in the home search process. There are many benefits to starting the search process of a real estate website like realtor.com® or Richmond Region Realty. You can view many homes and their details, take video tours, and access neighborhood info. However, it's also important to view homes in person. While the property details may seem similar online, homes can differ in layout, design, quality, and other aspects. Ideally, you should view homes with the help of an experienced real estate professional who'll notice things you might miss, provide expert analysis, and act as an impartial sounding board.
5. Make an offer and negotiate with the seller
Once you've found the home you'd like to buy, it's time to make an offer. Your state or local real estate association likely has contracts generally used for transactions in your area. These contracts enable you to specify a sale price and allow the inclusion of clauses specifying various purchase terms, such as the closing and possession dates, your deposit amount, and other conditions. You should carefully review these clauses with your real estate professional to be sure that they accurately express your intended offer. In addition to drawing up the contract, your real estate professional will be happy to address all of your questions about the offer process. Once you've written the offer, your real estate professional will present it to the seller or the seller's representative. At that point, the process will vary somewhat depending on the market you're to make a purchase. Generally speaking, the seller can accept your offer, reject it, or counter it to initiate the negotiation process. Subsequent counteroffers, with deadlines for responding and meeting conditions, may be exchanged between you and the seller until a pending mutual agreement exists or the negotiations break down. Negotiations involve many factors relating to different market conditions, homes, and sellers.
6. Secure your financing
Once you have a pending agreement, it's time to return to your chosen lender to finalize mortgage details to close the deal. It means completing your down payment, interest rate, regular payment schedule, and all other financial conditions associated with the closing. As the saying goes, 'let the buyer beware. Unfortunately, too many buyers suffer negative consequences from not fully understanding their financing decisions. Thus, it would be best if you worked with people you trust. In this regard, a good real estate professional can become a true friend for life. Close the deal - If you've efficiently taken care of everything connected with purchasing your new home, taking ownership should be a positive joy with no surprises. Key steps to the closing, also referred to as the "escrow" or "settlement," include: Getting a title search – you will need a historical review of all legal documents relating to ownership of the property – to ensure that there are no claims against the title of the property. It's also necessary to purchase Title Insurance for protection in the event of errors in the records or mistakes in the review process. The final walk-through – you will be given a chance to look at the home one last time to make sure it's in the same condition as when you signed the sale agreement. Typically, the settlement– on the Closing Date, you'll meet with a lawyer, real estate professional, or escrow agent to verify and sign all the paperwork required to complete the transaction. The settlement will include paying your closing costs, legal fees, property adjustments, and transfer taxes. You'll receive the property title and copies of all documentation about the purchase at that point. Oh, and one more thing – you'll get the keys!