Monday, August 22, 2011

Home Buying 101

Although buying your first home can be exciting, most first time buyers are intimidated by the process and technical terms that go along with it.  Furthermore, sorting through endless information on the internet can be completely overwhelming and leave you the buyer unsure where to even start.  The list below will help to serve as a general outline of the process but, is by no means a substitute for a good Buyer's Agent.

1.)  Choose a Realtor:  When interviewing a Realtor it is important to find someone you trust.  It is also important to pick an agent that focuses the majority of their business representing buyers and even better yet...first time home buyers.  If the Realtor acts like they don't have time for you, is impatient with your questions or works primarily with sellers, they are probably not what you are looking for.

2.) Meet With a Lender:  If you already have a relationship with a lender you are a step ahead but, most first time buyers do not.  Not to fear.  Assuming you have found an experienced and trust worthy Realtor to work with, they will be able to refer you to local lenders.  By meeting with a lender early on, you can figure out how much home you can afford so, you avoid looking at homes that are not in the right price range for your financial situation.

3.) Pick a Home:  This is usually the most exciting part of the home buying process.  Your Realtor will discuss with you what criteria you are looking for (number of bedrooms, number of bathrooms, location, garage etc.) to narrow down your search.  You can then go out and physically look at homes to determine which is right for you.

4.) Make an Offer:  Once you have found the right home, you will want to submit a Purchase Offer.  In order to determine a fair purchase price your Realtor will research past comparable sales to determine the fair market value of the home.  Once the purchase price is determined the Realtor will draft an offer for you to be submitted it to the Listing Agent.  To make your offer more agreeable to the seller, your lender will provide a pre approval or pre qualification letter that confirms to the seller your ability to secure a loan.  In addition, you will submit a portion of your down payment called Earnest Money to be held in escrow (NOT buy the sellers).

Your original offer can be accepted as is, rejected outright or countered.  If you receive a counter offer from the sellers your Realtor will explain the terms and conditions of it and you then have the choice to accept it as is, counter or reject it.  Having a Realtor that is a strong negotiator is crucial during this time to help you acquire the home at a price you are happy with.

5.)  Under Contract:   Congratulations your offer has been accepted!!!  It will still usually take four to six weeks for your deal to close and a few important things need to happen during that time.  First of all, you will want to get a Title Insurance Policy that insures against any liens or encumbrances on the property.  Assuming you picked a knowledgeable Realtor, they will have preexisting relationships with Title Companys and can guide you through this process.  You will also want to have a Professional Home Inspection done to find any defects with your new home.  Again, your Realtor should know several home inspectors and help guide you through this process.  Lastly, your lender will engage an appraiser to confirm that the home is worth at least as much as the purchase price agreed to.  Now, by no means is this an exhaustive list of all that happens while under contract but, it is a general outline of some of the bigger happenings.

6.) Closing:  Typically a day or two before closing you will be provided with all of the documents that you will need to sign.  It is important that you review these documents and be sure to let your Realtor know about any questions or concerns you have.  Sometimes closings occur in a formal, face to face meeting and sometimes they happen via fax, email and snail mail.  The means by which you sign closing documents will depend on logistics and geographical location of the parties involved.

These six steps serve as a great outline to give you the buyer a general idea as to what you can expect when purchasing your first home.  However, there are always a lot of details involved in a Real Estate transaction that a good Realtor will help you navigate.  If you want to know more about these details or have questions about anything related to purchasing a home, please feel free to contact me anytime.

All the best,

Tyler MacGuire
Broker Associate
Omni Real Estate Company
Web: www.tylermacguire.com
Email: www.tylermacguire@hotmail.com
Cell: 970-409-7779

      

"Your Guide to Summit County Real Estate"