8 Steps To Buying Your Home
8 Steps to Buying Your Dream Home In Asheville
"We've never bought a house before ... and we need help!"
Being a first time home buyer can be scary. But you will find that be better educated about the home buying process will reduce the stress and worry and will eventually actually enpower you!So let's get started with how the whole home buying process works...
1. Decide to Buy
Although there are many good reasons for you to buy a home, wealth building ranks among the top of the list. We call home ownership the best “accidental investment” most people ever make.
But, we believe when it is done right, home ownership becomes an “intentional investment” that lays the foundation for a life of financial security and personal choice.
There are solid financial reasons to support your decision to buy a home, and, among these, equity build-up, value appreciation, and tax benefits stand out.
Base your decision to buy on facts, not fears. If you are paying rent, then you can very likely afford to buy a house!
~ There is never a wrong time to buy the right home. All you need to do in the short run is find a good buy and make sure you have the financial ability to hold it for the long run.
~ The lack of a substantial down payment doesn't prevent you from making your first home purchase.
~ A less-than-perfect credit score won't necessarily stop you from buying a home.
~ The best way to get closer to buying your ultimate dream home is to buy your first home now. Buying a home doesn't have to be complicated; there are many professionals who will help you along the way.
2. Hire Your Buyer's Agent
The typical real estate transaction involves at least two dozen separate individuals: insurance assessors, mortgage brokers and underwriters, inspectors, appraisers, real estate attorneys, buyer's agents, seller's agents, bankers, title researchers, and a number of other individuals whose actions and decisions have to be orchestrated in order to perform in harmony and get a home sale closed.
It is the responsibility of your real estate agent to expertly coordinate all of the professionals involved in your home purchase and to act as the advocate for you and your interests throughout.
3. Secure Financing
While you may find the thought of home ownership thrilling, the thought of taking on a mortgage may be downright chilling. Many first-time buyers start out confused about the process or nervous about making such a large financial commitment.
From start to finish, you will follow the six-step, easy-to-understand process below to securing the financing for your first home.
Six Steps to Financing a Home:
2. Make a loan application and get pre-approved.
3. Determine what you want to pay and select a loan option.
4. Submit to the lender an accepted offer to purchase/executed contract.
5. Get an appraisal and title commitment.
6. Obtain funding at closing.
4. Find Your Dream Home
You may think that shopping for homes starts with jumping in the car and driving all over town, and it's true that hopping in the car to go look is probably the most exciting part of the home-buying process.
However, driving around is fun for only so long. If weeks go by without finding what you're looking for, the fun can fade pretty fast. That's why we say that looking for your home begins with carefully assessing your values, wants, and needs, both for the short and long terms.
9 Home Buying Questions You Need to Ask Yourself:
~ What do I want my home to be close to?
~ How much space do I need and why?
~ Which is more critical: location or size?
~ Would I be interested in a fixer-upper?
~ How important is home value appreciation?
~ Is neighborhood stability a priority?
~ Would I be interested in a condo?
~ Would I be interested in a new construction home?
~ What features and amenities do I want? Which do I really need?
5. Make an Offer
When searching for your dream home, you were just that - a dreamer. Now that you have found that dream house and you're writing an offer, you need to become a business person.
You need to approach this process with a cool head and a realistic perspective of your market. Now is the time to sit down with your buyer's agent and get their expert counsel and advice on how to make the best offer.
The three basic components of an offer are price, terms, and contingencies (or “conditions”).
Price - The right price to offer must fairly reflect the true market value of the home you want to buy. Your agent's market research will guide this decision.
Terms - The other financial and timing factors that will be included in the offer.
Contingencies - below are listed the most common conditions in real estate contracts.
6 Basic Contingencies or Conditions in a Real Estate Offer:
1. Schedule - A schedule of events that has to happen before closing.
2. Conveyances - The items that stay with the house when the sellers leave.
3. Commission - The real estate commission, or fee, for both the agent who works with the seller, and the agent who works for the buyer (both usually paid for by the seller).
4. Closing Costs - It's standard for buyers to pay their own closing costs, but if you want to roll the costs into the loan, you need to write that into the contract.
5. Home Warranty - This covers repairs or replacement of appliances and major systems. You may ask the seller to pay for this.
6. Earnest Money - This protects the sellers from the possibility of your unexpectedly pulling the plug on the deal, and it makes a statement about the seriousness of your offer.
6. Perform Due Diligence
Unlike most major purchases, once you buy a home, you can't return it, even if something breaks or doesn't quite work like it's supposed to. That's why home owner's insurance and home inspections are so important.
The home inspection should expose the secret issues a home might hide, so you know exactly what you're getting into before you sign your closing papers.
Your major concern is any structural damage. Don't sweat the small stuff! Things that are easily fixed can be overlooked.
If a big problem shows up on your inspection report, you should bring in a specialist to evaluate it in more detail.
And if the worst-case scenario turns out to be true, you might want to walk away from the purchase. But talk to your agent about the best options for you i this case.
Once the inspection is done you should start shopping for home owner's insurance.
A home owner's insurance policy protects you in two ways: 1) Against loss or damage to the property itself. 2) Liability, in case someone sustains an injury while on your property.
The final stage of the home buying process is the lender's confirmation of the home's value and legal statue, and your continued credit-worthiness.
This entails a survey (if needed), appraisal, title search, and a final check of your credit and financing. Your agent will keep you posted on how each are progressing, but your work is pretty much done.
You just have a few pre-closing responsibilities:
~ Stay in control of your finances. Now is not the time run up credit bills on new furniture.
~ Return all phone calls and paperwork promptly. Don't slow down the process by being hard to reach.
~ Communicate with your agent at least once a week. Nowadays, everyone is busy, so make sure to keep in touch.
~ Several days before closing, confirm with your agent that all your documentation is in place and in order.
~ Obtain certified funds for closing. Talk to your agent or attorney about what is considered "certified funds".
~ Conduct a final walk-through of the property. Yes, unexpected things happen, so verify before the closing day.
On Closing Day
On the day of your closing, with the guidance of an real estate closing attorney (required here in North Carolina) and your agent, you'll sign documents that do the following:
Finalize your mortgage.
Pay the seller.
Pay your closing costs.
Transfer the title from the seller to you.
Make arrangements to legally record the transaction as a public record.
As long as you have clear expectations and follow directions, closing should be a momentous conclusion to your home searching process and commencement of your home owning experience.
8. Protect Your Investment
Throughout the course of your home buying experience, you've probably spent a lot of time with your real estate agent, and you've gotten to know each other fairly well.
There's no reason to throw all of that trust and rapport out of the window, just because the deal has closed.
In fact, your agent wants you to keep in touch!
Even after you close on your house, you agent can still help you:
~ Handle your first tax return as a home owner.
~ Help your friends find homes.
~ Keep track of your home's current market value.
~ Find contractors to help with home maintenance or remodeling.
Attention to your home's maintenance is essential to protecting the long-term value of your investment.
Home Maintenance Falls Into Two Categories:
1. Keeping it clean - Perform routine maintenance on your home's systems, depending on their age and style.
2. Keeping an eye on it - Watch for signs of leaks, damage, and wear. Fixing small problems early can save you big money later!
If you would like more information on buying a home, please contact ourhome buyer specialist, Rachel Alosky, at 828-737-1608 or by email at [email protected]
Author: Rachel Alosky
February 11th 2016
About Rachel: Rachel is a New England native who has called Asheville home for the past 12 years. She is an avid ...