With everything that is going on in the market now people seems to think the rules for real estate have changed. They haven’t … For buyers looking to purchase a home, there are eight steps that should be followed to ensure a smooth and rewarding transaction.
1. Get your finances in order - Savings, Credit and the TRUE COST of home ownership - OH MY!!!
A home is likely going to be the single largest purchase you make in your lifetime. Although it can be a little scary at times (mostly because it is unfamiliar) it is definitely one of the most rewarding as well. TRUTH #1 - It is going to cost you money. Do you have any monery in your savings? Have you been maintaining your credit or o you even know what your FICO score are? The amount of down payment on a property and your credit score are going to be large determining factors in the type of loans that you qualify for. This will in turn affect your monthly payment. Can you get a loan with $0 down, sure but it is going to cost you …. Refer to step #2. Any agent worth his weight in salt will sit down with you (I prefer over a cup of coffee or a nice chilled energy beverage) and discuss this with you. ASK QUESTIONS !!!
2. Find an agent - Let’s face it - you can’t swing a dead cat in this town and not hit 4 people with real etate licenses. What you need is not somebody with a license, you need somebody who has your best interest in mind. Talk to potential agents - ask friends and neighbors for referrals and interview them. Don’t be afraid to say to yourself - not too sure I like that guy/gal, let’s keep looking.
3. Lets get you preapproved - based on current credit and income we will get you preapprove for a loan to figure out “hom much” house we can afford.
4. Start the hunt - Here is where your agent really styarts to earn his/her keep. Baesed on your price range and a series of other likes/dislikes that I’m sure you’ve shared with your agent they will start the search. Once the search is complete you and the agent will them preview the properties and see which one fits you the best.
5. Make an offer - Once you have found your house you need to figure out (with the help of your agent) how much you will offer for the home. Your offer will be baed on sellers asking price, visual inspection of the home, recent sale comparables in the area and overall market condition. In a sellers market (more buyers, less inventory of homes) you may want to offer a little more money knowing that there will likely be other offers on the same house. In a buyers market, as we are in right now (January 2008), you can get a little more agressive with the offer. Once the offer is submitted to the sellers agent, the seller can either accept it in whole, reject it, or subit a counter offer back to you changing some or all of the terms that you stipulated in your initial offer. This can go back and forth as many times as necessary but the end result will hopefully be an offer that everyone can live with.
6. Put a fork in the financing - Once the offer is accepted, you now have everything you need to finalize the financing. You will have hard numbers to work with and can then work with your lender to select the apropriate financing option (as there will usually be many)
7. Home Inspection - VERY IMPORTANT - Hire a professional to inspect the home. The home inspector will check everything from the foundation and roff to the electrical, HVAC and plumbing systems. Remember, the initial home inspector is a sort of “Jack of all trades”. They may not be able to diagnose all problems exactly but will definitely be able to tell you if there are issues that need forther investigation. If the home inspector finds anything (and the good ones always do), you as the buyer can go back to the seller of theproperty and ask them to fix any issues that come up.
8. Closing - Once you are happy with the outcome of your inspections and your financing is in order it is time to “CLOSE” escrow. Escrow is held by an independent 3rd party to the transaction (not the buyer or seller). This 3rd party (in California usually a title company) makes sure that all of the terms of the contract are in place - they make sure that all of the money is processed they way it needs to be and all of the paperwork is signed. Once this is all done and the funds are sent where they need to go copies of the deed will be recorded with the country recorder and you are the proud new owner of a home.
Once you actually own the home and get moved in then it is time to go into “homeowner” mode and start with the periodic maintenance of the property because it is much easier to maintain your property a little at a time as opposed to all at once. Remember, the process that you just went through to get this home is the same process that somebody else will go through in a few years so take care of the home and it will surely take care of you.
