Guide To Buying Your Own Home
Congratulations! Buying your own home is one of the smartest financial decisions you will ever make. For most Americans, the equity that they build in their home is their biggest source of wealth. I realize that buying a home can be a stressful undertaking. Whether this is your first home purchase or your twentieth, you want things to go as smoothly as possible with no last minute surprises.
This guidebook is designed to familiarize you with how the whole system works, and make you as comfortable as possible about the home buying process.
The first step is to meet with the mortgage company to be pre-approved for your loan (unless you are paying all cash). This first step is very important for several reasons. Once you are pre-approved, you can shop for your new home in confidence, knowing that you won't have any problems getting the loan. Many buyers who skip this step and just go out house hunting are unsure and nervous when they find a home that they like, because they don't really know for sure if they will be approved for the loan. Loan underwriters have specific rules and guidelines they must follow. Many would-be homebuyers have been dismayed and disappointed to find out 2-6 weeks after they enter a contract that the lender has turned them down.
Please realize that one of the biggest fears a home seller has is that they will enter into a contract with a buyer, prepare to move, and then find out that the buyer didn't qualify. When you get pre-approved first, you obtain a letter from the loan company stating the amount and type of financing for which you are approved. When shown to a seller, the letter makes the seller feel more comfortable, and will add more power for you in negotiations. Many of the best homes can have several offers on them at the same time from different buyers. Often, the buyer that can show that they are already approved for their loan will get the house.
The bottom line is that getting pre-approved for your loan first means stress-free home shopping and potentially more leverage with the seller!
You can use any lender you wish, but I strongly recommend that you use a mortgage company and loan officer with which we are familiar. They can meet or beat the interest rate and pricing of any other lender, plus you will never be at the mercy of some outside company - waiting around helplessly trying to find out the status of your loan from some mysterious unknown person. The home buying process is quite complicated, and nothing will throw a wrench into things faster than a mortgage company that drops the ball.
You may have already met with the loan officer. If not, here is a list of items you should bring to your loan application.
- W-2 (2 years) & current pay stubs
- Past 2 years pay history for landlord/mortgage company
- Employment information (2 year history)
- All bank account numbers and balances
- Last 3 month's bank statements
- Open loans - names, addresses, account #, balances, monthly payments
- All information on any other real estate loans
- Drivers license or other photo ID
- Check for credit report
- Certificate of eligibility or DD214 (VA loan only)
- Self employed: Last 2 year's complete tax returns, year to date Profit & Loss and Balance Sheet
The next step is for you to come into the office for your initial consultation. We will sit down and evaluate your situation, and determine if it is in your best interests to proceed with buying a home at this time.
I can then show you homes we have available. This includes advising you about the community, values, trends, and helping you pick the home. I also will assist with the financing and structuring the contract. I also coordinate all of the details with the title/escrow company, mortgage company, appraiser, inspector, other real estate agents, etc. throughout the entire process. You can rest assured that everything will be handled properly. I have over 25 years combined real estate and mortgage banking experience and hundreds of successful transactions.
The next step is to determine the features and benefits that you are looking for in a home. We will review items such as:
- PRICE RANGE
- AREA STYLE SIZE
- 1 OR 2 STORY
- NUMBER OF BEDROOMS
- NUMBER OF BATHROOMS
- FAMILY/BONUS ROOM
- AGE OF HOME
- LOT SIZE
- POOL/SPA
- FIREPLACE
- GARAGE S
- PECIAL REQUIREMENTS, ETC.
Many agents will just throw you into their car and drag you through a bunch of houses - many of which you won't be interested in. I respect the value of your time, and only want you to view the homes that YOU want to see!
Once we find the home that best meets your needs, we will write up the purchase agreement and other necessary paperwork. Our goal is to get you the home that you want.
A day or so prior to closing we will conduct a "walk-through" inspection to make certain that all items specified to stay with the home are still there, and to verify that all heating/cooling, plumbing, electrical, mechanical, and other systems are in proper working order.
There are many different forms and papers involved in the home buying process, and we know that can be a little scary to some people. Included in this guidebook are all of the necessary forms for most transactions. We will review all of them at our first meeting to make sure you are familiar and comfortable with them. It is all really pretty straight forward.
The average time from getting the contract accepted to closing is about 30 days, although shorter or longer closings can be negotiated. Every transaction is unique, so I will monitor all of the details very closely, keeping you informed every step of the way.
Remember that I am here to help. If you are concerned or confused at any time, let me know immediately. There is no such thing as a stupid question when you are dealing with a large investment like this!
To review, the steps in the home buying process are:
Step 1 - Determine if buying a home now is smart for you.
Step 2 - Get pre-approved for your loan.
Step 3 - Study the real estate market.
Step 4 - Identify neighborhoods you like.
Step 5 - View specific homes.
Step 6 - Pick a home that meets your needs.
Step 7 - Analyze the value.
Step 8 - Negotiate the contract.
Step 9 - Close and move.
Don't hesitate to call us any time you have a question or concern.
