Home Buying Strategies for Buying a Home
So, you are beginning your home search. Consider the questions below when starting to think about the possibility of owning your new home:
Are You Ready to Buy a Home?
Do You Have Enough for a Down Payment?
Having a House to Sell First?
How Much Do You Know About The Real Estate Marketplace?
Do You Understand The Differences Between Real Estate Agents?
How Will you Find a Buyer Agent?
How Will you Find Other Professionals Such As A Real Estate Attorney, A Home Inspector, A Mortgage Originator?
Do You Know Your Wants vs. Needs?
What Is The Best Method for House Hunting?
Where Do You Find Homeowners Insurance?
What is A Home's True Value?
What to Expect For The Down Payment & Other Costs?
Is There Creative Financing For You?
What is the Process of Making an Offer to Buy a Home?
Do You Have The Knowledge of Escrow, the Closing, and Settlement?
What Is In The Purchase Contract?
What Is Title and Title Insurance?
How is a Home Appraisal Different From A Home Assessment?
Why Do you need Home Inspections?
What Happens If You Have Less-than-Perfect Credit?
How To Go About Finding a Mortgage?
What Are The Current Mortgage Interest Rates?
What Is The Mortgage Process?
What Are Mortgage Closing Costs?
What Types of Mortgage Loans Are There?
What Is Your Credit & What Involves Getting a Mortgage?
What Is Private Mortgage Insurance (PMI) And Do You Need/Want it?
Seems like there is an endless array of questions. Here is an excerpt from an article written by www.homebuyersbeware.com staff to help you better understand the process of buying a home. Some information has been modified to reflect opinions of Home Team AdvantEdge Co.
Understanding the Home Buying Process
By: HomeBuyersBeware.com Staff
Here is a comprehensive time-line of the 19 steps of the home buying process with a description of each. Notice that half the process takes place before you make an offer on your new home and just as much is still to do after your offer is accepted.
COLOR KEY
Steps You Are Responsible For
Steps Your Buyer's Agent Will Assist You With
Steps Your Buyer's Agent Will or Will Have Someone Complete
Step Number and Description
Usually Complete Within
Pre-Search Phase
Step 1: Research Your Target Location
Learn as much as you can about taxes, school districts, demand, desirability and average price of homes sold in the general area you hope to move to.
1 to 7 Days From START
Step 2: Decide on Your Location Wants & Needs
Make a list of the things most important to you such as proximity to schools and shopping, rural setting, tax rates, etc. Decide which items are "wants" and which are "needs".
1 to 7 Days From START
Step 3: Narrow Your Desired Location to Between 3 - 6 Specific Areas
If you don't narrow your search, you'll get frustrated, confused and overwhelmed. Choose 3 areas you would be happy to live in and 3 "second" choices in case you don't find what you're looking for in the first three.
5 to 10 Days From START
Step 4: Decide on Your House Wants & Needs
Make a list of the things most important to you such as number of bedrooms and bathrooms, size of lot, color of the house, etc. Decide which items are "wants" and which are "needs". It is also helpful for your buyer agent if you have a list of "must haves" these are the minimum requirements for your home.
5 to 14 Days From START
Step 5: Research Mortgage Rates & Get Pre-Approved for Your Mortgage
Getting Pre-Approved tells you exactly how much you can afford, what the closing costs will be, makes your offer look better than others, and gives you a chance to lock in a rate without being obligated to anything. In many "hot" markets, sellers and Seller's Agents may not let you tour a home until you are Pre-Approved!
Know your numbers - your income, your debt, and your credit score!
Many true buyer agents will require you to be pre-approved prior to working with them because a pre-approval makes you a "serious buyer".
1 to 14 Days From START
Search Phase
Step 6: House Hunting - Browse Listings of Homes for Sale
You can browse listings online, in newspapers and real estate magazines, or by driving around and finding "For Sale" signs. Remember, the names in the advertisements are almost always the agents that work FOR THE SELLER and are legally obligated to answer your questions as such.
7 to 17 Days From START
Step 7:
A: Interview a Buyer Agent
Ideally, you will talk to your friends and relative and find out who they worked with and if they had a great experience. Research Buyer Agents on line. Ask questions such as the agents experience, education, and commitment. See if you have a connection built on trust and mutual goals.
B: Make an Appointment WITH YOUR BUYER'S AGENT to Tour the Homes You Like
Your Buyer Agent will teach you the most efficient t method of finding your home. This will save you time and money. At Home Team AdvantEdge Co., We teach you how to preview a home via "Drive By" so that your time is best spent on the properties which you are most likely to consider buying.
Remember, the Seller's Agent is obligated to show you the home while working in the Seller's best interests. Your Buyer's Agent will know what to look for, which questions to ask, and how to spot tricks-of-the-trade. Tour the home focusing on structure, not aesthetics. Paint and wallpaper can be changed. A weak foundation or leaky roof may be deal-breakers.
10 to 21 Days From START
Step 8: Make a Realistic Offer on the Home You Want
Your Buyer's Agent will assemble a CMA to help you gage an appropriate offer price and help you to understand the contract terms and legal jargon. Too low of an offer may not be taken seriously and won't receive a counter-offer. Too high of an offer is exactly what you don't want. This is the trickiest step in the process that your Buyer's Agent will consult you through.
14 to 30 Days From START
Offer Period
Step 9: Negotiate Your Offer
Your Buyer's Agent will present and negotiate your offer to the sellers and their Seller's Agent. This includes dickering, positioning, and even "selling" the terms of your offer to the sellers - all while working in your best interests.
17 to 33 Days From START
Step 10: Your Offer is Accepted
When the negotiating is done and everyone agrees, the final offer is accepted and signed by everyone. Once signed, it legally becomes the Purchase Contract.
1 to 3 Days From OFFER
17 to 33 Days From START
Post-Offer / Pre-Closing Phase
Step 11: Your Attorney Reviews and Approves the Purchase Contract
You will usually have three days for your Attorney to approve the Purchase Contract. Your Attorney will check for unfulfilling contingencies or unlawful requirements as well as agreements that may expose you to legal risk. If s/he doesn't approve of deal, the Contract is cancelled.
3 Days From ACCEPTANCE
20 to 36 Days From START
Step 12: Formally Apply for Your Mortgage
The formal Mortgage Application Process will be simpler since you are already Pre-Approved. In this step is where your mortgage broker has you fill out the entire application and then sends it to underwriting to be approved.
3 to 7 Days From ACCEPTANCE
20 to 40 Days From START
Step 13: Have the House Appraised and Inspected
The appraisal and pest inspection are required by your mortgage bank. You'll want to get a structural inspection to protect yourself. If your new home has well and septic systems, you'll want those inspected too. Commit to be there during the home inspection so that you can hear first hand about the issues that will most definitely come up. Remember, no house is perfect but it is up to you to decide if the condition of the house warrant the offer you have made on it.
This is a good time to do any other research you and your Buyer Agent deems necessary. Go to the town hall and ask for a "field card", learn about the abutting neighbors. Find out if there are any future plans for development in your neighborhood. Talk to your new neighbors.
7 to 14 Days From ACCEPTANCE
24 to 47 Days From START
Step 14: Obtain a Homeowners Insurance Policy
You will need an annual policy paid in full for the first year. Your mortgage bank will need a copy of the receipt and binder.
1 to 21 Days From ACCEPTANCE
18 to 54 Days From START
Step 15: Get Final Approval of Your Mortgage and
Receive the Commitment Letter
Waiting for the bank to finish underwriting your loan is usually the second longest step in the process. More often than not, the bank will need more information from you such as past bank statements or written explanations of anomalies. Get the bank whatever it needs as quickly as possible!
28 to 42 Days From ACCEPTANCE
45 to 75 Days From START
Step 16: The Title Company will Assemble the Abstract of Title
This step of the process will be started by your Attorney or Buyer's Agent. The Title Company checks through decades of public records to make sure that the people selling you the home actually own it. It may sound silly, but the bank requires it and it protects you from someone showing up on your new doorstep someday claiming they actually own the property. This step takes the most time of any step in the process.
35 to 49 Days From ACCEPTANCE
45 to 75 Days From START
Step 17: Schedule the Closing and Do the Final Walk-Through
At this time you will need to let everyone know you are moving: file a change of address card with the post office and call Utilities to change the name for the house location.
Once you have the bank's Commitment Letter and the Title Company's Abstract of Title, your Attorney can schedule the Closing (a.k.a. Settlement.) A few days prior to Closing, you and your Buyer's Agent will walk through the house one last time to make sure everything is in order.
40 to 54 Days From ACCEPTANCE
57 to 87 Days From START
The Closing Phase
Step 18: The Closing (a.k.a. Settlement)
You, your Buyer's Agent, your Attorney, the sellers, the Seller's Agent, the sellers' Attorney, the bank's Attorneys, and the Title Company's Attorney all sit down at the table and sign off on tons of paperwork. You finally get the keys to your new home and walk away with enough fine print to keep you busy for a year. Be ready to sign your name at least two dozen times.
45 to 60 Days From ACCEPTANCE
62 to 93 Days From START
Step 19: Move In
Your Buyer Agent will coordinate your receipt of your new keys. Yes, you can move in the same afternoon as the Closing. The house is yours to do with as you please. And no, your Buyer's Agent probably won't help you move furniture. Your home buying process is over.
45 to 60 Days From ACCEPTANCE
62 to 93 Days From START
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